Economist 6/30/16

  1. Social Progress Index (SPI), by the Social Progress Imperative, an American think-tank eschews GDP entirely and focuses on 53 social and environmental output indicators under three headings: basic needs, the foundations of well-being and opportunity.The latest index, published on June 28th, springs few surprises in its main ranking. Nordic countries, western Europe, Canada and Australia gain the highest scores in fulfilling citizens’ basic needs such as housing, sanitation, health outcomes, safety, access to the internet and also promoting tolerant, inclusive societies that offer opportunities for advanced education. The United States comes 19th, owing to poor scores on personal safety, health and environmental quality. African countries and conflict-ridden nations such as Yemen fare worst.Gains in social progress appear to slow when a country enters middle-income status. It also becomes harder to improve at a high-income level as countries face rich-world problems such as obesity.
  2. New, more interesting browsers have started cropping up. In August internet users will be able to download the first full version of Brave, the brainchild of a co-founder of Mozilla. Mozilla itself is working on a new type of browser which will give users suggestions on where to navigate next.March saw the release of Cliqz, a browser developed in Germany; a month later came Vivaldi.Building a new browser from scratch is a fiendishly difficult and expensive undertaking. Only Apple, Google and Microsoft have the money and resources to throw at developing a fast “engine”, as the core of a browser is called. Their dominance also scares off investors.
  3. Insurgents are trying to overcome the obstacles in three ways. To reduce development costs, their products are based on existing open-source projects, such as Chromium, which also powers Google’s Chrome. They get money from angel investors, who have an appetite for risk. And most important, they aim their products at niche segments. Brave, for instance, is for surfers who prize privacy. It can block annoying online advertisements and privacy-invading “trackers”, which lurk on websites to follow users around. Cliqz also blocks trackers and is integrated with a new search engine. Vivaldi pitches itself as a browser for “power users”.Such small browser-makers do not need the scale of their competitors to make money (Chrome has more than 1 billion users). Both Vivaldi and Brave say they can break even with a few million users apiece. The easiest source of revenue is search deals. Companies such as Google pay roughly one dollar per user per year to be the default search engine on rival browsers. Vivaldi is also experimenting with charging firms to be featured on its home page.
  4. Since 2003, about 75 countries linked to the diamond supply chain have allied with non-governmental organisations in the Kimberley Process (KP), which aims to ban the export of diamonds to fund conflict. It is still considered a badge of honour within the industry.Financial stresses are also mounting, especially on “sightholders”, the family-run middlemen who buy rough diamonds and ship them to places like Antwerp and Mumbai for cutting and polishing. Since the financial crisis, banks have come under pressure to ensure they are not lending to businesses associated with money-laundering, transfer pricing and terrorist financing. The publicity-shy middlemen have been caught out by the pressures to improve transparency.In June Standard Chartered shut down its $2 billion diamond-financing business, saying it was beyond the bank’s new “risk tolerance”.The reputational headaches have been compounded by a glut of diamonds caused by a slump in consumer demand in China. That has dragged prices of top-quality cut diamonds down from about $12,000 per carat to $7,400 in five years.
  5. Against this backdrop,boffins are improving their ability to cultivate diamonds in labs. They are looking beyond the billions of carats of synthetic diamonds produced under high temperature and pressure that are used in industries such as oil drilling.Since last year, California-based Diamond Foundry has been producing lab-grown rough diamonds of a quality almost indistinguishable from those dug up from the ground, produced using chemical-vapour deposition, a technology common in semiconductors.The firm seeks to bolster their appeal by attacking traditional miners at their weakest point—ethical sourcing. The impact is more deeply felt because one of its backers is Leonardo DiCaprio, star of “Blood Diamond”, a film released in 2006.Sales of such diamonds are still minuscule compared with the $14 billion of rough stones dug up each year.

Economist 6/29/16

  1. Canada has 15 free trade deals in place. The largest and most important to the country is the North American Free Trade Agreement (NAFTA) between Canada, Mexico and the United States, which came into force on January 1st 1994.Canada has also negotiated but not signed a pact with the EU that went further than NAFTA in some areas.The Canada-EU Trade Agreement (CETA) grants Canada limited access to Europe’s single market, though its future is complicated by Brexit.The CETA shares common elements with NAFTA. They are trade agreements rather than customs unions. Members retain separate external tariffs and rely on rules of origin to determine whether an item is eligible for preferential treatment.Both call for almost all tariffs to be eliminated, allowing the free flow of goods and services, but crucially not of people and capital. NAFTA has a skeletal secretariat to resolve disputes. The work is done by tribunals that are set up as needed.Should Britain decide to copy the Canadian model with the EU it would gain the independence in policymaking and border-control that Brexiteers desire but would no longer be unfettered freedom of movement for people and capital, and Britain would not have a say on the rules of the single market.
  2. THE emerging stars of European scriptwriting have been raised on a rich diet of “The Sopranos”, “The Wire” and “Breaking Bad”, so it is little surprise that more are striving to write for the small—rather than the silver—screen.The rise of long-form television series is twinned with a general decline in the film industries of many European countries. While there are exceptions, Italian films often struggle to do well overseas, and in France, fiscal difficulties mean that cinema is becoming increasingly mainstream in order to fill seats. Independent directors are finding new scope and creative freedom in television.Making long-form serialised television drama in Europe has become more profitable, and thus increasingly attractive, over recent years. Experienced and acclaimed writers—such as Matthew Weiner of “Mad Men”—can fetch around $2m-$3m for showrunning a series. A less well-known figure might earn $100,000, and a staff writer (the term given to an individual writer on the showrunner’s creative team) would earn a significant amount less.But for many screenwriters, the appeal of television lies not in money but in the creative freedom it allows.
  3. Oi, one of the largest state backed telecom operators made the largest bankruptcy-protection filing in Brazilian history on June 20th.Brazil’s interim government says it will not bail out the company, which is in debt to the tune of 65 billion reais ($19 billion).The product of a state-sponsored merger eight years ago aimed at building a homegrown giant in a market dominated by foreign firms, Oi was even regarded as a potential global player. It is the country’s largest fixed-line firm, but has struggled to compete with international rivals in the much more lucrative mobile market, where it is Brazil’s fourth-largest operator, despite lots of official funding and regulatory changes in its favour.Like many firms in the country, Oi piled on debt during the boom years.
  4. Between 2005 and 2015 the world’s cities swelled by about 750m people, according to the UN. More than four-fifths of that growth was in Africa and Asia; specifically, on the fringes of African and Asian cities. With few exceptions, cities are growing faster in size than in population. Lagos, the capital of Nigeria, is typical: it doubled in population between 1990 and 2010 but tripled in area. In short, almost all urban growth is sprawl.To planners the sprawl seems haphazard, and it has bad consequences, especially in Africa. But it has a logic of its own, and in any case cannot be wished away.
  5. Dar es Salaam has swelled so much that almost all building now is in what is technically countryside. Land there can be bought and sold, but only informally; commercial developers will not touch it. The buyers, largely families moving out of the city centre, cannot encumber land that they do not truly own, so they cannot obtain mortgages.The urban fringe is littered with “almost houses” and shops selling building supplies.If house-building is slow, installing roads and other infrastructure is much more so.Homes now have electricity but little else.Shlomo Angel of New York University has studied seven African cities in detail: Accra, Addis Ababa, Arusha, Ibadan, Johannesburg, Lagos and Luanda. He calculates that only 16% of the land in new residential areas developed since 1990 has been set aside for roads—about half as much as planners think necessary. And 44% of those roads are less than four metres wide.s the suburbs of Dar es Salaam fill up, their residents will gain officials’ ears. But retrofitting chaotic districts with roads and sewers will be slow, hard and pricey.

Economist 6/28/16

  1. Latin Americans save much less than the experts think they ought to. Compared with residents of developed countries, and especially those of emerging Asia, Latin Americans stand out for their lack of thrift.The IDB (Inter-American Development Bank ) identifies three main problem areas: the financial system, pensions and government spending. Although Latin America’s financial systems are more solid than they were in the past and have grown, they remain “small, expensive and inefficient”, the IDB says. On average bank loans to the private sector are equal to only 30% of GDP in Latin America, compared with 80-100% in rich countries or in emerging Asia.The pension problem is severe. Although the population is ageing, only 45% of Latin American workers contribute to any kind of pension scheme, the IDB says.Another problem is that Latin American governments save too little, and favour current spending over public investment. Subsidies and pay for bureaucrats take priority over transport, energy and water infrastructure.
  2. The region’s low propensity to save has historic roots. Generations of Latin Americans have seen their governments wipe out their savings either through inflation or by simply confiscating them. That is why so much capital has flown the region over the past half-century.Some economists argue that Latin Americans have developed their own common-sense instruments of saving. They invest in building their own houses and in educating their children. They trust that rental income and family solidarity will provide for them in old age.
  3. Even the most hawkish critics of Iran agree that it has done its bit for the nuclear deal. Within months of the deal being signed last July, Iran began to dismantle almost all of its centrifuges, which could be used to enrich uranium to weapons-grade purity, and to move its stockpile of low-enriched uranium out of the country. That work has been speedily completed.The West, too, has kept to the letter of the deal. The sanctions imposed on Iran as its nuclear programme intensified in the 2000s have been lifted.The problem lies outside the accord. Iran has tested nuclear-capable ballistic missiles and is waging wars, directly and by proxy, around the Middle East. America maintains its unilateral sanctions, which were imposed long before the nuclear crisis. They concern Iran’s dire human-rights record; its support for terrorist organisations, including Hamas in Gaza and Hizbullah in Lebanon and Syria; and its development of long-range missiles. These sanctions were excluded from the nuclear negotiations.
  4. America’s non-nuclear sanctions are hurting Iran in two ways. The “primary” ones ban American companies and individuals from dealing with the regime, subject only to a tightly controlled list of exceptions which include food, medicine and commercial airliners (Boeing has just signed a big order with Iran). Any transaction that passes through an American bank or insurance company, even tangentially, or uses the dollar, or involves an American citizen working for a foreign company, is theoretically subject to sanctions.Under “secondary” provisions, America reserves the right to punish foreign firms if they do business with anyone on a list of designated people and institutions, among them Iran’s Islamic Revolutionary Guards Corps. Perhaps the Supreme Leader did not understand the nuclear deal, or perhaps Mr Rohani oversold it. More likely, Iran is trying to extract extra concessions that it has not negotiated.
  5. Two months after opening, this Starbucks still pulls impressive queues on weekends. Famous international brands are a bit of a novelty in South Africa. Similarly enthusiastic crowds met the launches of the first Krispy Kreme Doughnuts and H&M clothing shops in Africa late last year. Burger King, which opened in 2013, had long queues for months.Shoppers have been pinched by rising food prices and a weak rand that makes imports costlier. So far, though, this hasn’t stopped the country’s aspirational middle class from splurging. When the spiffy new Mall of Africa (home to South Africa’s second Starbucks shop), opened in late April it drew more than 120,000 people and snarled up traffic for miles.Many of the new middle class are living beyond their means. South Africa has one of lowest savings rates in the world. According to the government, nearly half of South Africans with access to credit are struggling to meet their monthly payments or in arrears.

Economist 6/27/16

  1. Since the Lisbon treaty came into force in 2009 there has been only one legal mechanism: the country that wants to leave EU must invoke Article 50, which sets out how it happens.Under Article 50 it is for the other 27 countries to decide, by majority vote and without British participation, the terms of Britain’s exit. The article sets a two-year deadline for this process, which can be extended only by unanimous agreement of all 27 countries. If no deal is agreed in that time, Britain would cease to be an EU member and revert to trading with the EU on normal World Trade Organisation rules.Once that is done, there will also be negotiations over Britain’s new trade relationship with the EU.And the new rules for trade will also have to be approved by all 27 remaining EU members and ratified by their national parliaments (and the European Parliament). That process could take many months: the EU-Canada trade deal agreed two year ago still has not been ratified.
  2. Taylor Swift has joined nearly 200 musicians and record labels in a campaign aimed at the largest streaming service, YouTube.Their call for a change in copyright law is sure to fail, but the underlying gripe with Google’s streaming service will find sympathetic ears. Streaming of music via on-demand video services more than doubled in America last year, to 172.4 billion songs, according to Nielsen, a research firm. Ms Swift, Sir Paul McCartney, U2 and others signed a letter, published in several Washington periodicals on June 20th, asking Congress to make it more difficult and costly for those streaming services to host versions of songs uploaded by users. Google and Facebook, among others, will vigorously oppose any change to the Digital Millennium Copyright Act, which grants them “safe harbour” from liability for copyright infringement.
  3. A more realistic goal for the music industry is to persuade YouTube to pay more for playing their songs. The service is the leading destination for on-demand music but a small source of revenue. IFPI, a trade body, reckons that 900m people used ad-supported user-upload services such as YouTube to listen to music last year, but that the industry got only $634m from those streams. Subscription-based services, including Spotify, paid $2.3 billion to musicians in 2015.Analysts reckon YouTube collected up to $9 billion in advertising revenue in 2015, some $5 billion of which would have been due to content creators and rights-holders. Those figures could double or even triple by 2020. By then YouTube might be making money.Three big record labels—Universal Music Group, Warner Music and Sony Music Entertainment—are negotiating new deals with YouTube that they hope will lead to a bigger slice of the pie.
  4. SoftBank’s official reason for Mr Nikesh Arora’s resignation is that Mr Son decided he wanted to carry on as chief executive for another five years or more. Mr Arora wanted to take over sooner. But his brief record at the company must have had something to do with his departure.Mr Son believed his protégé’s connections in Silicon Valley could land him the right tech deals. Mr Arora’s investment spree include a $1 billion punt on Coupang, a loss-making South Korean unicorn. Hundreds of millions also went into an array of cash-bleeding ride-hailing firms in Asia, including India’s Ola. But the mood has shifted. Now SoftBank’s activities are widely viewed as symptoms of the frothiness and mania that have gripped the tech sector.
  5. Mr Arora’s free rein to back startups particularly annoyed shareholders. One group of disgruntled investors led a campaign to oust him.When they listed their complaints earlier this year, Mr Son pledged “complete trust” in Mr Arora. On June 20th, a special committee of SoftBank board members concluded that the various complaints were “without merit”. Yet a day later he resigned.A particular issue was Mr Arora’s pay. In the 2014 fiscal year he took home ¥16.5 billion ($156m), and last year he pocketed ¥8 billion, in a country in which bosses receive on average around ¥100m a year.Mr Son is taking steps to reduce risk by selling assets and paying down some of the debts his firm has accumulated, in part through buying Sprint. SoftBank has agreed to sell some of its stake in Alibaba, a Chinese e-commerce giant, for $10 billion, and is to dispose of a stake in Supercell, a Finnish game developer.

Economist 6/24/16

  1. BRITAIN is on its way out of the European Union. In a referendum on June 23rd 51.9% of voters opted for Brexit, on a high turnout of 72.2%. London, Scotland and Northern Ireland plumped for “Remain”, while the rest of Britain voted “Leave”.A striking amount of the variation in the vote can be explained by demographics. According to an exit poll by Lord Ashcroft, 73% of voters aged 18-24 voted for Remain, while 60% of voters aged 65 and over voted for Leave. Similar divisions were apparent across education levels: 57% of degree-holders voted to stay in the European Union, while most of those with only secondary-school educations wanted to leave.Once the dust has settled migration and visa-free travel will, for many, be the greatest worry of a looming Brexit. Some 3.3m EU citizens in Britain are bracing for the uncertain months—or years—ahead. The biggest community affected will be the Polish with 900,000 immigrants, followed by the Irish and Germans with 400,000 and just under 300,000, respectively.More than 1.2m Brits currently live in other EU member states, primarily in Spain, Ireland, France and Germany. The expat community will be unsure of what its future holds—just like Britain herself.
  2. BRITAIN has voted for Brexit. What happens now? Nothing immediate, is the answer for EU nationals living in Britain and Britons living elsewhere in the EU, as well as for businesses on both sides of the Channel. It will all depend on negotiations that could take years—and no one is sure quite how many years, because the only precedent is Greenland, with a population today of around 50,000, which voted to leave in 1982.Mr Cameron has promised that Britain would immediately invoke article 50 of the Lisbon treaty, which sets a two-year timetable to agree the terms of departure. But uncertainty about his own position could raise questions about this. If he steps down and a Brexiteer takes over as leader of the Tory party and as prime minister, he or she is likely to argue that Article 50 is biased against the interests of a country leaving the EU. Under Article 50, the terms of Britain’s departure would be agreed by the other 27 EU countries, without a British vote. So Brexiteers would prefer to negotiate informally, without invoking Article 50. The other 27 countries are unlikely to go for this.
  3. The kind of deal offered is a longer-term question, with neither main option very palatable. The first is to become like Norway, which is a member of the European Economic Area (EEA), in return for which it is required to contribute to the EU’s budget and allow the free movement of people. The second is to opt out entirely, trading with the EU under the rules of the World Trade Organisation like America, China or any other country. Most economists agree that this would do more damage to the British economy.
  4. The world’s biggest banks must brace themselves for Britain’s departure from the European Union.Banks’ share prices have been hammered, and those of British lenders hit especially hard.Barclays and Lloyds down by almost 30% when the market opened. European banks were not spared: Deutsche Bank shed 21%, Credit Suisse and UBS 13% each.For all that, banks’ stability should not be in question. They have known for months that the vote was coming.In the longer run, however, Britain’s financial industry could face severe difficulties. It thrives on the EU’s “passport” rules, under which banks, asset managers and other financial firms in one member state may serve customers in the other 27 without setting up local operations. That is how the British subsidiaries of non-EU banks (eg, Americans, Japanese and Swiss) are able to do business throughout Europe from London, and a big reason why London has become the EU’s financial capital.
  5. Unless passports are renewed or replaced, they will lapse when Britain leaves. A deal is imaginable: the EU may deem Britain’s regulations as “equivalent” to its own. But agreement may not come easily. French and German politicians, keen to bolster their own financial centres and facing elections next year, may drive a hard bargain. No other non-member has full passport rights.Alternative models do not look attractive. Switzerland is a member of the European Free Trade Association, and has 120-odd bilateral agreements with the EU. Canada’s trade deal with the EU excludes most financial services. Norway has broad access to the single market, but has no say in setting the rules. Norway has broad access to the single market, but has no say in setting the rules.The City is not going to crumble. But it is likely to lose some business to other, smaller financial centres, meaning Dublin and Luxembourg as well as Frankfurt and Paris.

Economist 6/23/16

  1. METEOROLOGISTS are forecasting a bumper monsoon for India this year. This is good news for the more than 600m people—about half of India’s population—who depend on the rains it brings.Monsoon climates typically have two very distinct seasons: wet and dry. In India, the onslaught of the rains begins when moist air is carried northwards from the Indian ocean during the summer.. Many factors seem to affect the duration and intensity of the monsoon. One is El Niño, a climatic phenomenon associated with warmer temperatures in the tropical Pacific ocean. Last year the monsoon proved disappointing while El Niño was in full swing: total rainfall between June and September was 14% below the 50-year average. How exactly the phenomenon interacts with the monsoon is not well understood.
  2. India is the world’s fourth-biggest emitter of greenhouse gases. The insulating effect of such emissions helped make last year the hottest on record; this year looks set to be even more scorching. A warmer atmosphere probably means even greater variability in the monsoon.Rainfall extremes are expected to increase, thanks in part to the fact that a warmer atmosphere can hold more moisture (about 7% more, for every degree Celsius of warming).Aerosols such as black carbon interact with sunlight. Some of these tiny particles—many less than a tenth the width of a human hair—scatter light, while others absorb it. In the former case, this prevents the light from warming the earth’s surface. In the latter, absorbing the light causes the particles to warm the air around them. Both alter the heating of the atmosphere, and therefore the heating of the land relative to the ocean—the process which drives the monsoon.
  3. Four years ago Boyan Slat, a Dutch inventor then aged 18, came up with the notion of using floating barriers to gather the millions of tonnes of plastic waste that end up in the sea each year and then harvesting it for recycling. With backing from the Dutch government and Boskalis, a marine-engineering firm, the idea gets its first real-world trial today. A 100-metre-long prototype will be deployed off the Netherlands’ coast to test its resilience to waves and currents (the real thing would be dozens of kilometres long) and check that the contraption poses no extra dangers to marine life.
  4. In recent years, airline safety videos have become entrancingly, maddeningly catchy.Virgin America is widely credited with launching the genre of entertaining safety videos, with a crudely animated effort in 2007.Air New Zealand was next. In 2009, it pioneered a new development in safety instruction: videos that would catch the attention not just of passengers, but also of the masses on the internet.Its masterpiece was a video narrated by nude airline crew members wearing body paint resembling their uniforms.Within a few weeks, a related 45-second commercial had become the most-viewed YouTube video ever from New Zealand. It was cheap publicity. According to the New York Times, “Each video took a day to shoot and cost about 10% to 15% of the cost of a major brand commercial.”Air New Zealand raised the bar again, for better or worse, in 2011, with a video that went well beyond simple safety instructions.Nonetheless, it gained more than 2m YouTube views in a week.Air New Zealand’s biggest hit was a Middle Earth-themed safety video, starring Elijah Wood and director Peter Jackson, that was released in 2014.
  5. Then there are alternate takes on the genre, like the one adopted by the Philippines’ Cebu Pacific, whose flight attendants favour a live safety performance while dancing to Lady Gaga.Yes, they are more likely to gain some flyers’ attention, but with some stretching to five minutes in length, they may also be just as likely to lose it. The useful instructions can get lost amid all the dancing, singing and cartoon characters. And despite greater variety, these videos are not actually delivering messages that are any clearer or more memorable.

Economist 6/22/16

  1. The leaders of the world’s 200m Orthodox Christians have rarely, in recent times, managed to speak together and address a clear message to humanity.It has been hard work because many of these churches are institutionally weak and beholden to geopolitics; some barely survived communism and others form tiny minorities in Muslim lands. Some liken the gathering to the last of the great doctrinal councils in 787; others compare it to more recent gatherings like one in Jerusalem in 1672.For the organizer, Patriarch Bartholomew I of Constantinople, who is first “amongst equals” in Orthodoxy, there were last-minute setbacks: four of the 14 churches that were expected to attend.One document approved by the Council this week (and endorsed earlier by the four churches which didn’t attend) looks at the world through an Orthodox Christian lens, using spiritual arguments to denounce inequality, the arms build-up and the ecological crisis as moral diseases.
  2. More than 11m Americans claim to have Scandinavian ancestry. This pales against the 46m who say they have German roots or the 33m who trace their ancestry to Ireland, but the 5m Norwegian-Americans are roughly equivalent to the whole population of Norway. No country, except Ireland, lost as high a percentage of its population to America as Norway. The scope of Swedish immigration is similarly vast: between 1880 and 1920 around 20-25% of the population left for America.Swedes and Norwegians left their homelands to escape grinding poverty, restrictions on religious freedom and the compulsory military draft. Arable land was scarce and few other jobs were available. The mass exodus, the often harrowing journeys and tough new beginnings made a deep impression on their collective psyche.
  3. Most Scandinavian immigrants managed to build better lives as farmers, mostly in the upper Midwest, where the landscape and climate resembled home, as fishermen on the north-west coast or with jobs in rapidly industrialising cities. Chicago was an especially popular destination for Swedes.Some of the newcomers from the North succeeded beyond their wildest dreams. Charles Walgreen, the son of a Swedish immigrant, set up Walgreen’s, America’s largest chain of drugstores. Swedish-born Johan Nordstrom created Nordstrom, an exclusive retail empire. Eric Wickman founded Greyhound, America’s biggest bus line.The poverty rate of Americans with Swedish ancestry is only 6.7%, half the national average. Swedish-Americans are better off even than their cousins at home: their average income is 50% higher than theirs.Their success in America seems solidly grounded in old national virtues. They have more trust in each other and in government; they tend to obey rules.
  4. FLYING a helicopter is tricky, especially when hovering.Flying a drone, by comparison, is easy-peasy.One passenger drone currently undergoing flight tests is the Volocopter VC200 With 18 separate rotors it might seem to be an ungainly contraption, but its makers, e-volo, a company based in Karlsruhe, Germany, claim it is more stable than a conventional helicopter. It is certainly more straightforward to fly and can be operated with just one hand.The idea behind the Volocopter and similar craft under development is that, like a drone, they are packed with sensors, including gyroscopes, accelerometers and magnetometers, which combined with an on-board computer system means the aircraft flies largely autonomously.The technology is sufficiently advanced that there is nothing to stop passenger drones taking to the air, provided they can meet the same safety standards as other light aircraft and are flown by trained pilots. At a price for a small machine that is likely to be similar to that of an upmarket car—and a fraction of the cost of a new helicopter—they could prove extremely popular in recreational and sport aviation.
  5. The next step is to persuade aviation authorities that because the craft are so heavily automated they can be safely and reliably flown by people with only a little training. Convincing officials of that could take a few years, but it is possible.Unmanned drones can already be flown under existing guidelines. This week America’s Federal Aviation Administration (FAA) finalised its rules for civil drones weighing less than 55lbs (25kg). They must be kept in line of sight, below 400 feet (122 metres) and away from people. To use a drone for commercial purposes the operator must undertake an approved training course.The VC200 gained permission to fly from German authorities earlier this year. It has an all-in weight of 450kg and, in its present form, a flight duration of 30 minutes. After completing a series of flight tests the VC200 should be fully certified by 2017 in a category of aircraft known as an “ultralight”. The company have taken this route because it will get the VC200 into the air faster and allow valuable flight experience to be built up while discussions continue about creating a possible new class of aircraft for passenger drones.