Fast-tracking passengers through security is all well and good, but in reality saves precious little time for additional work. Equally, a few inches more legroom and metal cutlery are pleasant, but not essential for a flight that lasts such a short time. And beyond those small things, the benefits become even less apparent.The real utility of flying business class on such journeys has little to do with the plane at all, but the access it grants to airport business lounges while waiting to board. These comfortable, relatively quiet spaces with fast WiFi are a good place to get things done away from the chaos of the departure lounges—especially if delays or the need to make a connecting flight mean spending hours in limbo. But as any road warrior knows, you don’t need to fly premium to gain access to these havens.
THE murder of a 23-year-old woman in Seoul, the South Korean capital, on May 17th is shocking for at least two reasons. The crime, in which the suspect stabbed the victim to death in public toilets in the bustling district of Gangnam, was a heinous one. But it is also a very uncommon one: South Korea’s homicide rate, at 0.8 murders per 100,000 people, is lower than that of Australia, Norway and France. About 70% of South Korean women say they feel safe walking alone at night.The circumstances of the tragedy have sparked intense public debate. Although the police have tentatively concluded that the murder was not a hate crime—the suspect was diagnosed with schizophrenia in 2008, and had been in psychiatric care as recently as last year—the man’s explanation to the police that he “hated women for belittling him” has stunned South Koreans.
Whatever the suspect’s motive, South Korean women have been quick to identify with the discrimination. Many of their pinned notes ponder the state of sexual equality in South Korea. That is not surprising in a country that ranks a dismal 115 of 145 countries for gender equality, according to the World Economic Forum, putting it close to Burkina Faso and Zambia, and coming in well below stubbornly patriarchal Japan. South Korea’s gender wage-gap is the largest of any rich country. From January to August last year, 87% of the victims who reported violent crimes were women. By law camera phones must produce a shutter sound (as in Japan) because up-skirt filming is so common.
This week the Society for Worldwide Interbank Financial Telecommunications (SWIFT), a network that thousands of banks around the world use to move money, described a recent spate of cyber-heists, which netted $90m.Investigators are still trying to piece together how thieves pulled off a spectacular hack that siphoned $81m out of Bangladesh’s central bank in February, let alone who was behind it. This was one of the biggest-ever bank robberies, but it could have been worse: $850m of the bogus transfer requests were blocked.The scam sent banks and SWIFT scrambling to check for other infiltrations.Ecuador’s Banco del Austro is suing Wells Fargo for waving through fake transfers of $12m ($3m of which was later recovered) to accounts in Hong Kong.
In each of the cases that have come to light, the thieves hacked into the bank’s system, used malware to log on to the SWIFT network using the bank’s unique code, and re-routed transactions to new beneficiaries.SWIFT, a co-operative owned and used by 11,000 financial firms, processes 25m messages a day, covering half of all big cross-border transfers. Were it to be compromised, trust in the global payments system could evaporate. SWIFT insists its network and core messaging services were not breached; the security problems were at the banks themselves.Nevertheless, calls have grown for SWIFT to do more.But SWIFT has no power over banks. That is down to regulators, whose performance in this area varies greatly. Among the most switched-on is the Bank of England, which runs a widely respected resilience-testing programme for big banks that includes mock attacks. British banks that fail to beef up their defences may even be forced to hold extra capital.
The stance of the British Medical Association (BMA) is clear: doctor-assisted dying should not be made legal. But the organisation’s policy was drawn up a decade ago, and the wider discussion has moved on since then. Two assisted-dying bills were brought before parliament last year alone, though neither was successful. The topic has been debated at seven of the BMA’s 13 annual meetings since 2003.Doctors are the people who would have to put any new law into practice. And those who draft legislation look to the BMA as the voice of the profession. Its opposition was a big part of why the bills brought before parliament last year did not pass, reckons Dignity in Dying. Its Californian counterpart’s decision to shift from opposition to neutrality was probably essential in the state governor’s decision to sign an assisted-dying law last October.
Lebanon has more refugees per head of population than any other country; its near-neighbour Jordan has one-third the number.Government does not allow official refugee camps) make up 15-20% of the Syrians in Lebanon. Most of the rest rent their homes, which are often just garages or disused warehouses. The camp-dwellers are the poorest of the bunch, obliged to sell assets and take on debt to pay their bills, including annual rent of $300-$1,000 a year per tent. NGOs are on hand to help, but food rations have been cut for lack of funding.Lebanon’s economy was spluttering even before the Syrian refugees crossed over, and the 1.5m now inside its borders—more than the total number of asylum-seekers who reached Europe last year—make up over one-quarter of its population, disrupting the labour market, overburdening water and sanitation systems and, since the vast majority are Sunni, upsetting the sectarian balance.Add to all this the apparently insoluble problem of the half-million Palestinian refugees living in the country.
Under a deal struck in 1993 Syrians could work in Lebanon without visas; perhaps half a million were doing so before the war. (Jordan had a similar arrangement.) Many of the scruffy refugee settlements around Lebanese towns grew out of informal housing plots for Syrian farm workers. Syrians working illegally for low pay on farms or building sites are competing mostly against each other (or Palestinians); few Lebanese are interested in such jobs.Perhaps half the Lebanese economy is underground, and the authorities tend to turn a blind eye to Syrians who work without permits.Every refugee has a story to tell about ill-treatment at the hands of locals, but there have been no widespread protests or reports of systematic persecution. The wide dispersal of refugees around the country may have helped.Life has become much tougher for refugees since the government tightened its rules last year. Registered Syrians must now pay $200 to renew residency permits and sign a pledge not to work; the non-registered require a Lebanese sponsor.
Dadaab,a sprawling collection of refugee camps in the Kenyan desert 90km (56 miles) from the Somali border, is closer to the reality of most of the world’s displaced people. Some 345,000 refugees, 95% of them Somalis who have fled across the border, are spread across five camps, their lives governed by dozens of NGOs that have little understanding of development or state-building, and a Kenyan police and security presence that at times can feel more like an occupying force.Back in 1991, when the UNHCR first consolidated the informal settlements established by Somalis fleeing civil war into an organised refugee camp, no one expected Dadaab to last this long.In many respects the NGOs that run the place do a fine job. The schools they operate are overstretched, but that is partly because they have attracted lots of pupils. There are no funds for treating chronic conditions, but the clinics are clean and well run; a cholera outbreak late last year was quickly contained.
But agencies can do only so much. Few refugees are able to work. Once children finish school there is little chance of higher education except for the lucky few who obtain scholarships to places like Canada.Many refugees have simply pressed pause on life, idling away the hours by chewing the fat (or the khat).Dadaab is a much safer place these days, but that is not how Kenya’s politicians see things. The government says the camps harbour al-Shabab terrorists.In May it abruptly disbanded its department for refugee affairs and said it would close Dadaab by May 2017, without explaining how such a massive operation might be carried out. Some saw the announcement as a ruse to extract more money from donors, who have been distracted by the Syrian crisis. Since 2010 the UNHCR’s funding for Dadaab has fallen from $223 to $148 per person a year (excluding food).In 2013 the UNHCR and the Somali government bowed to Kenyan pressure and backed returns for Somalis in Dadaab. Under this “tripartite agreement” the UNHCR arranges journeys back to Somalia for willing refugees.Over 14,000 refugees have returned since the scheme took effect in December 2014. But that is not fast enough for the government.
THANKS in part to the surge of refugees from Syria, the United Nations High Commissioner for Refugees (UNHCR), the UN’s refugee body, now puts the world’s displaced population at a post-war record of 60m, of whom 20m are stranded outside their own countries.Except for a couple of bright spots, such as the possible return of up to 6m internally displaced Colombians after a peace deal between the government and the guerrillas, the problem is getting worse. New conflicts in places like South Sudan are creating fresh refugee problems; older ones, such as Somalia’s, grind on with no solution in sight.
THE alarmingly named Expropriation Bill, passed on May 26th by South Africa’s parliament, is being hailed by the ruling party as a victory for blacks who were dispossessed of their land by white colonists. More than two decades after the first democratic election of 1994, the vast majority of land is still owned by white South Africans. The African National Congress (ANC) has until now operated a “willing seller, willing buyer” policy of land reform. But this has proved slow and ineffective. Only about 8-10% of white-owned land has been transferred to black owners since the party came to power, a third of its target of 30%.The ANC is heading into municipal elections, set for August 3rd, in a weakened state. The Economic Freedom Fighters (EFF), an upstart rival that promises the nationalisation of mines and expropriation of white-owned land without compensation, has been drawing votes from poor young blacks. Through the Expropriation Bill, the ANC hopes to steal back some of its popularity.
Digital music landscape continues to narrow.Google has owned YouTube—named the number one music-streaming platform since 2006. In February, YouTube spent $8m to acquire BandPage, a San Francisco start-up that helps artists sell merchandise, concert tickets and fan experiences. In 2014, Beats Music, a subscription-based streaming service, bought Topspin Media, another innovative platform that helped artists sell merchandise and albums directly to fans. A year later, Apple bought Beats Music, and then discontinued the streaming service when it launched Apple Music.Spotify is positioned in the middle, between the mammoths and the remaining few independents. To the small fry, Spotify is huge: earlier this year, the streaming and subscription service—with its 30m subscribers —raised $1 billion in debt financing, on top of the previous $1 billion raised in several rounds of equity investment.
SoundCloud, launched in 2007 by two musicians, now has roughly 175m users. It has built a solid reputation for allowing for remixes, mash-ups and commenting features that proved popular for artists as well as fans.8tracks, with its pleasingly-retro name, is either the biggest of the smalls, or the smallest of the medium-sized. Each month, approximately 5m people—mostly university students—use the crowd-curated radio service, whose biggest competitors are Pandora and iHeartRadio.It is also crowdfunding, raising money by selling equity to its loyal users.Pandora has never turned a profit since going public in 2011—last week an investor encouraged the company to sell itself. Mr Porter says 8tracks has music from all over the world being packaged by users who feel those tunes are underrepresented elsewhere.The only hope for Spotify—as well as SoundCloud and 8tracks—is to offer something besides a massive catalogue; they can never outspend Apple or Google. But they can help fans—and super fans—get more connected with artists in myriad ways.
Today, Kharkiv remains a litmus test for whether Ukraine can satisfy its Russian-speaking people and turn itself into a functional country.Opinions differ on how close Kharkiv came to become another breakaway “people’s republic”.Kharkiv has always been a bit grander than its coal-dusted neighbours. In the late 1800s, local coal magnates built flamboyant mansions here. Under the Soviet Union the city became a centre for advanced engineering. The loss of the Russian market has dealt a near death-blow to state-owned monoliths that were in need of modernisation anyway. The Kharkiv Tractor Plant has virtually ceased production; Turboatom, a maker of turbines for nuclear power stations, has lost the bulk of its sale.Foreigners are frightened off by Kharkiv’s proximity to the front line, and the Ukrainian new rich prefer to make quicker bucks in property or commodities.For the young engineers still pouring out of the city’s institutes, the big new industry is information technology. More than 200 IT firms employ some 14,000 software developers, and boast a roster of big-name American and European clients.
Student protests are not just a Nigerian problem: across Africa, unrest has prevented universities from functioning, with many forced to close for weeks at a time. Classes at Fourah Bay College, part of the University of Sierra Leone and the oldest institute of higher education in sub-Saharan Africa, were suspended in March after student strikes.Soaring tuition fees, overcrowded buildings and rising living costs have prompted students to mobilise across the continent. There are several reasons why many African universities, both public and private, are cash-strapped. In oil-producing countries such as Nigeria, the drop in the price of oil has slashed government revenues by as much as 30%. China’s slowdown has damaged exporting economies like Sierra Leone. There, as in neighbouring Liberia and Guinea, the Ebola epidemic has battered the economy, reducing government subsidies for education.University enrolment remains relatively low in Africa, but demand for higher education is taking off as Africa’s young and increasingly well-educated population swells.
A report by an internal watchdog of the State Department, the inspector-general, into Hillary Clinton’s use of a private e-mail account for official business, suggests it could be. The report, which was released on May 25th, does not allege Mrs Clinton broke any law: that would have stoked fears of a campaign-ending indictment by the FBI, which is also investigating the matter. Yet it raises concerns about her conduct and uncandid response to the scandal—upon which Donald Trump, her unconscionable Republican rival, will now feast.Ever since Mrs Clinton’s e-mail server became a matter of public debate last year, she has said she broke no rules. To the contrary, the State Department report says she was under an “obligation” to seek clearance for her e-mail system, did not, and it would have been denied if she had done, due to “security risks”.On the evidence available, that says a lot about the origins of this scandal. Out of a neuralgic concern for confidentiality, Mrs Clinton overrode rules that her advisers considered to be less important than they were.
Mr Obama has made progress on nuclear-arms reduction and non-proliferation. He signed a strategic-arms-control treaty (New START) with Russia in 2010. A series of nuclear-security summits helped stop fissile material getting into the wrong hands. Most important, he secured a deal in July to curtail and then constrain Iran’s nuclear programme for at least the next 10-15 years.On Mr Obama’s watch the nuclear-weapons and missile programme of North Korea has become steadily more alarming. Its nuclear missiles already threaten South Korea and Japan.The taboo against nuclear weapons rests on three pillars: policies to prevent proliferation, norms against the first use of nukes and deterrence.No country in history has spent such a large share of its wealth on nuclear weapons. North Korea is thought to have a stockpile of around 20 devices. Every six weeks or so it adds another.Deterrence is based on the belief that states act rationally. But Mr Kim is so opaque and so little is known about how decisions come about in the capital, Pyongyang, that deterring North Korea is fraught with difficulty.
China does not want to overthrow Mr Kim. It worries that the collapse of a regime on its north-eastern border would create a flood of refugees and eliminate the buffer protecting it from American troops stationed in South Korea. About 90% of North Korea’s trade, worth about $6 billion a year, is with China. It will continue to import North Korean coal and iron ore (and send back fuel oil, food and consumer goods) as long as the money is not spent on military activities—an unenforceable condition.Protected by China, Mr Kim can pursue his nuclear programme with impunity. The sanctions are unlikely to stop him.Without any good options, what should America’s next president do? A priority is to strengthen missile defence. New THAAD anti-missile systems should be sent to South Korea and Japan, while America soothes objections that their radar could be used against China’s nuclear weapons. China should also be cajoled into accepting that sanctions can be harsher, without provoking an implosion.
A crackdown on corruption by the government of President Xi Jinping has made it risky for officials to schmooze with businessmen over bottles ofbaijiu (a liquor distilled from sorghum).Sales of China’s national spirit (and the world’s most popular hard liquor), which rose at double-digit rates from 2007 to 2012, were dealt a big blow. Annual growth in sales plunged to barely 3% in 2014 as purchases for official banquets and other forms of ostentatious boozing plummeted.Baijiu is now making a comeback. Sales last year rose by roughly 7%. baijiu continues to outperform beer on sales volume growth, “suggesting that Chinese consumers’ preference for baijiu remains intact.”Fully half of all baijiu purchases in 2012 were made by the government, but that figure had collapsed to just a small fraction of the total by last year. But Mr Luo also observes that many younger patrons prefer to sip wine at business dinners, even rebuffing their elders’ offers of baijiu.
AFTER two successive dry years, 330m people in India, around a quarter of the population, are facing acute water shortages.Over 600m people in India depend on agriculture for their living and nearly two-thirds of land under cultivation has no irrigation and so relies on rain. The period between June to September brings three-quarters of total rainfallbut is known to be erratic four out of ten years.Using subsidised electricity, farmers pump groundwater at will, drawing up more annually than China and America combined. A recent European Commission report counted more than 20m boreholes in India, up from tens of thousands in the 1960s. The water table is falling on average by 0.3 meters and by as much as 4 meters in some places. Water-starved regions often cultivate water-hungry crops like paddy, cotton and sugarcane. The problem is not lack of adequate water, but its reckless overuse. China, with a larger population, uses 28% less fresh water than India.An ambitious $165 billion water-diversion scheme for drought-prone regions is in the works. A total of 15,000 kilometres of artificial waterways are to link no fewer than 37 rivers.
FOR the second time in under a year, senior men from the Afghan Taliban have descended on Quetta, capital of Balochistan, the largest but least populated of Pakistan’s four provinces, to elect a new supreme leader.Mullah Akhtar Mansour, who was involved in the cover-up of Omar’s death and in a ruthless purge of rivals afterwards, is himself dead. He was killed on May 21st, on a lonely road in Balochistan, by an American drone.Mullah Mansour had the backing of a Pakistani state that gives sanctuary to Taliban leaders as a means of maintaining influence in Afghanistan. And whereas American drone strikes against militants in the tribal area of North Waziristan are long-established and carried out under rules secretly agreed with Pakistan, Balochistan was considered to be off-limits. In Afghanistan, people sick of endless Taliban attacks emanating from Pakistan were delighted. Afghan leaders had long wanted America to take the war against the Taliban to Pakistan.But America remains royally fed up with Pakistan, not least because of its reluctance to go after a key Taliban ally, the Haqqani network, sheltering in North Waziristan.
500 years after Thomas More coined the term “utopia”, it’s worth reassessing what is meant by an ideal community. For Fourier it took the form of the phalanx, a group of well-matched individuals living together in a phalanstery: a palatial residential complex complete with meeting halls, dining rooms, libraries, ballrooms, beehives, observatories and coops for carrier pigeons. Short-lived phalansteries were established across America, but the most successful interpretation of Fourier’s ideas was the Familistère in Guise, northern France, founded by Jean-Baptiste André Godin to accommodate the employees of his iron stove factory. Built between the years of 1859-1884, the Familistère continued as a worker-run cooperative until 1968.
The utopian socialists developed their ideas when Europe was in the first stages of industrialisation. Today’s start-up culture appropriates the communal values of earlier utopias to serve the purposes of the free market—we are taught to uphold teamwork as the highest ideal, while simultaneously being encouraged to compete as individuals.workspaces of today are gradually encroaching on the domestic sphere. We live in pursuit of innovation through distraction; whether it’s a wifi-supplied allotment, a canteen serving free haute-cuisine our escape routes are leading us back to the laptop. The phrase ‘work-life balance’ is becoming an archaism.. The new generations of workers failed to advance the inventions of their predecessors, and in 1968 the Familistère passed into private ownership.Godin placed too much faith in his workers to implement his vision.Digitally rendered employees chat, stroll, cycle, eat, knit, read and meditate—anything, as long as it doesn’t look like work. Like Fourier’s phalanx, they’re happy—buoyed up by a rising tide of positive psychology.Fourier called for the right to take pleasure in work. Perhaps we need to reclaim our right to dislike it.
“UNDERCOVER Boss” which began in 2009 on Britain’s Channel 4, is now in over a dozen countries, and the popular American version just aired its 100th episode. The premise is straightforward: a corporate executive spends time undercover as a low-wage worker in his or her own company. The boss learns about problems first-hand, rewards good employees and punishes the bad, all while trying not to screw up too badly at the cash register or on the mop.Middle management is often the bad guy on “Undercover Boss”. In one episode Rick Silva, chief-executive of Checkers, a burger chain, is threatened with a beating by a store-manager, who asks rhetorically if Mr Silva has any fast-food experience at all. Mr Silva can no longer resist: he drops his cover, and shuts down the store.Talented, funny, hardworking people get rewarded, and from the very top. The powerful learn a lesson and return to the boardroom with a plan to make jobs easier for their employees. Every episode includes a worker explicitly teaching the boss something about being a CEO, but the CEO never has anything to teach the workers about being workers.
Currently, employees earning over $23,660 are not eligible for overtime pay, a mandatory 50% wage bump for work in excess of 40 hours per week. Inflation has put most over this level: in 1975 62% of full-time salaried workers were eligible; today just 7% are. From December, the White House has announced, the threshold will rise to $47,476. That will probably boost the earnings of existing employees slightly, though firms are likely to cut wages for new recruits to keep costs down. They may also be discouraged from allocating workers more than 40 hours. That will hurt some. A slightly higher federal minimum wage would be a less risky route to higher pay. But changes to overtime rules, unlike the minimum wage, do not require the consent of Congress.
According to one survey (admittedly conducted by a travel firm, with an interest in gaining publicity) perhaps half of British office workers check their e-mails while on holiday. Yet, few people deny the benefits of cutting those electronic ties when on vacation—both to the company and the employee—through the greater productivity of less-stressed staff when they return. Indeed, one paper by the University of California at Irvine went even further, suggesting people do not necessarily even need the holiday itself to unwind. All they need is an extended break from e-mail to get the same benefit. In a strategy adopted by Daimler, it gives workers the option of automatically deleting the e-mails they receive while they are on holiday, instead sending an auto response informing the correspondent what has happened and suggesting he resends it when they return.
Extortion is an unavoidable feature of life in El Salvador. A vast, meticulously organised network touches every business, from kerbside tortilla-sellers to multinationals. Large stretches of country, including the centre of the capital city, are controlled by the Mara Salvatrucha gang and two factions of Barrio 18. Salvadorean authorities estimate that 60,000-70,000 people belong to gangs and that half a million more—relatives, business partners, corrupt politicians and police—are financially dependent on them.Salvadoreans pay $756m a year, about 3% of GDP, to gangs, according to a study by the country’s central bank and the UN Development Programme. El Salvador’s shockingly high murder rate is largely due to wars between them for control of territory.The study estimates that the total cost of violence, including the amount households spend on extra security and the lost income of people deterred from working, is nearly 16% of GDP, the highest level in Central America.
El Salvador’s gangs have neither the wealth nor the political clout of Mexico’s drug-traffickers. Gangs may now be using the money harvested from extortion to build up capital.Today’s gangland has its origins in Los Angeles, where the Mara Salvatrucha and Barrio 18 formed and from which they were deported by Bill Clinton’s administration in the 1990s.Francisco Flores, El Salvador’s president in the early 2000s, responded with a “mano dura” (iron fist), locking up thousands of gangsters, separately by gang, which increased the prison population by half.The gangs’ leaders began co-ordinating their activities nationwide from within prison.Extortion, which requires nothing more than muscle and a mobile phone, was the obvious way to make money.The 12-year war between El Salvador’s right-wing government and leftist guerrillas, which ended in 1992, had left ex-combatants without work, assault weapons without proper oversight and tens of thousands of Salvadoreans accustomed to taking orders from guerrillas or local security forces. The emerging extortion networks did not lack manpower.
With buses, the involuntary partnership begins when a “neighbourhood kid approaches you with a ringing mobile phone”, says the route’s “negotiator”A tough negotiator can bargain down la renta: Barrio 18 demanded $1,800 at first for the old lady’s packet. But those who refuse to pay can expect no mercy. In 2015, 93 transport workers were murdered and 134 buses were attacked.Transport is the most visible victim, but extortion spreads far beyond it. Gangsters control the entrances to urban slums, checking identity cards and demanding payment from residents.The National Council of Small Businesses, which has more than 10,000 members, says that 79% make extortion payments but only 16% report the crime.Bigger firms can afford more security and summon help from the government.Budding alliances between gangs and the economic and political elite will make dismantling the extortion networks harder.In a country where a quarter of people aged 15 to 29 are neither working nor in school, that is hard. The government has spent little money on programmes to employ gangsters or youngsters at risk of becoming one.
THE murder of a shopkeeper in Glasgow on March 24th has drawn attention to Britain’s relatively small and unknown community of Muslims called the Ahmadiyya. Asad Shah, who ran a flourishing newsagent’s in Scotland’s second city, was one of about 30,000 Ahmadis in Britain. He was killed by a Sunni Muslim, Tanveer Ahmed, who travelled up from Bradford, in the north of England.The Ahmadis differ from the mainstream in that they believe Mirza Ghulam Ahmad, the 19th-century Indian who founded their tradition in 1889, was a latter-day prophet. In many Muslims’ eyes, this makes their practice un-Islamic and blasphemous.Pakistan’s Ahmadis, of whom there may be 4m, were declared to be non-Muslims by the government in 1974. Then in 1984 General Zia ul Haq, Pakistan’s Sunni dictator, amended the laws again. Henceforth Ahmadis were prohibited from professing their faith.In view of this persecution and violence, Britain has become something of a haven for the Ahmadiyya. Hazrat Mirza Masroor Ahmad, the fifth khalifa (or leader) of the sect is now based in London and the annual worldwide gathering of the community takes place in rural Hampshire.
Azerbaijan has transformed itself from a failing state in the early 1990s to a rich and corrupt oil economy. Between 2003 and 2015 oil and gas revenues were $119 billion; the cash was spent on infrastructure, weapons and ostentatious follies.Some of the money the country earned from oil and gold mines has been funnelled into powerful people’s offshore accounts. But enough of it trickled down to fuel strong domestic demand, largely satisfied by imports.When the oil price crashed, the music stopped.Azerbaijan had to devalue its currency twice last year, after its central bank burned through some $10 billion of foreign-currency reserves trying to defend the manat.Azerbaijan has also been hit by the recession in neighbouring Russia, where hundreds of Azerbaijanis once worked. The economy was 3.5% smaller in the first quarter than a year earlier. Inflation is in double digit.
For much of his rule the legitimacy of Ilham Aliyev, the autocratic president who inherited his post from his father, rested on Western-operated oil and gas projects. Now he must choose between modernising the country or becoming more dictatorial.Spooked by the Maidan revolution in Kiev in 2014, Azerbaijan copied some of Russia’s repressive practices. Non-governmental organisations were deemed agents of foreign influence; dissidents were jailed.But Russia’s annexation of Crimea and the war in eastern Ukraine worry Mr Aliyev, too. Azerbaijan’s Nagorno-Karabakh region is occupied by Russian-backed Armenia.Struggling to cope with cheap oil and the need to finance energy projects, Mr Aliyev is now seeking to repair relations with the West.To appeal to the middle class, Mr Aliyev is trying to modernise the country while maintaining a tight grip on politics. He has launched a “one-stop shop” public-services bureau that largely eliminates the need to pay bribes for official documents.The model for the reforms is Malaysia. Much of the elite believes it can import economic reforms without touching the political system.Azerbaijan lacks a bureaucracy capable of reform.But it does have bright young Western-educated talent.
Last month, for the first time in post-war Austria, voters in the first round of a presidential election spurned the candidates backed by the centre-left Social Democrats (SPÖ) and centre-right People’s Party (ÖVP), which run the country in a “grand coalition”. In Sunday’s run-off they must choose between Norbert Hofer, the fresh-faced candidate of the far-right Freedom Party (FPÖ), or Alexander Van der Bellen, an aged professor backed by the Greens. Mr Hofer is the favourite, and the rest of Europe is alarmed.The FPÖ operates from a familiar populist-right playbook.The hostility has shifted from Jews to Muslims, a strategy that resonates with voters of Serbian background, whom the party has assiduously cultivated. Its leaders prefer social media to the traditional kind. Its base is poorly educated rural men.The Second Republic, established after the war, has been run almost without interruption by either, or (usually) both, the SPÖ and the ÖVP. Under Austria’s Proporz system, jobs, housing and business licences were doled out on the basis of party membership.This arrangement worked when growth was high and jobs plentiful. But when the system faltered, cronyism made an easy target for genuine opposition parties.
In fact, the risk business is booming everywhere, not just Brazil. With the Middle East in flames, Russia in adventurist mood and China paving over disputed reefs, geopolitics is again a concern of bosses everywhere.Helpfully for political-risk analysts, the latest surge in global uncertainty has coincided with the maturing of their industry. Stratfor, which has been flogging geopolitical foresight for two decades from its base in Austin, Texas, recently notched up a record 550,000 subscribers.Financial firms, which tend to read political scenarios the same way (broadly: sell statist, buy pro-business), were early adopters of generic subscription forecasts first offered by Stratfor and Eurasia. They still use these, but ever more bosses want assessments of company-specific risks too. That is a boon to firms such as Brazil’s Prospectiva, which has been demystifying the country’s confused trade and industrial policies for 14 years. It has grown by 20% to 30% a year since 2012, says Ricardo Mendes, a partner.Britain’s Control Risks has 100 political analysts in dozens of offices around the world, up from 30 in London ten years ago; they supplement its main business advising companies on how to keep workers safe and fight fraud. Giant management-consulting firms, such as McKinsey, are bundling political-risk analysis with other prescriptions for corporate betterment.