Economist 7/27/16

  1. In Transparency International’s Corruption Perceptions Index, Nigeria is 31st from the bottom.Nigeria’s president, Muhammadu Buhari, a former military ruler, wants to change this.Many locals think the problem reached unprecedented heights under the previous administration of Goodluck Jonathan. In March an official audit found that the state-owned oil company withheld over $25 billion from the public purse between 2011 and 2015.Since Mr Buhari came to power in May 2015, dozens of public officials and their cronies have been arrested by a beefed-up Economic and Financial Crimes Commission (EFCC). The most famous of those, the former national security adviser Sambo Dasuki, is charged with dishing out $2 billion worth of fake contracts for helicopters, aeroplanes and ammunition. Under new management, the Nigerian National Petroleum Corporation has grown slightly less opaque: it now publishes monthly financial reports.
  2. His political opponents, who ruled Nigeria for 16 years until 2015, call the campaign a witch-hunt. The EFCC is yet to send down any of its most influential adversaries. Most government agencies, including the one that collects taxes, do not make their budgets public. Nor do most state and local governments, which suck up about half of public revenues.The finance minister, Kemi Adeosun has struck thousands of ghost workers off the public payroll. Her “treasury single account” may be the biggest coup of all. It replaced a labyrinth of government piggy banks, giving Nigeria more control of its earnings. Financiers reckon that it could serve as a lesson to others in West Africa as well.
  3.  In a bid to convince the country that his wife is a caring as well as a clever woman, Mr Bill Clinton combined folksy story-telling with patient exposition.There was politics in Mr Clinton’s decade-old memories, as when he described driving his future wife home to her family in suburban Illinois, and waxed lyrical about its post-war prosperity.Daring the crowd to lose interest, the former president told stories about his wife holding a listening tour of all 75 counties of Arkansas to investigate pre-school education. But all the folksiness was building up to a point. If the country is anxious and unhappy and longing for change: “She’s the best darn change-maker I have ever met in my entire life.”Will this work? Mr Clinton is a fine speaker and explainer of things. But is he tackling the right problem?But critics do not think his wife is lazy, or stupid. They think she is a crooked schemer, and a big-government liberal who wants to tax them, regulate business into ruin and take away Americans’ guns.
  4. Tens of thousands of Palestinians in Salfit and the surrounding villages are suffering through a months-long drought. Most of Israel’s water is artificially produced. About a third comes from desalination plants that are among the world’s most advanced. Farmers rely on reclaimed water for irrigation. Israel recycles 86% of its wastewater, the highest level anywhere; Spain, the next best, reuses around 20%.None of these high-tech solutions helps the Palestinians, though, because they are not connected to Israel’s water grid. They rely on the so-called “mountain aquifer”, which sits beneath land Israel occupied in 1967. The 1995 Oslo Accords stipulated that 80% of the water from the aquifer would go to Israel, with the rest allocated to the Palestinians. The agreement, meant to be a five-year interim measure, will soon celebrate its 21st birthday. During that time the Palestinian population in the West Bank has nearly doubled, to almost 3m. The allocation has not kept pace.On average they get 73 litres per day, less than the 100-liter minimum recommended by the World Health Organisation.Israel’s water authority sells the Palestinians 64m cubic metres of water each year. It says they cause their own shortages, because up to a third of the West Bank’s water supply leaks out of rusting Palestinian pipes.
  5. The American Psychological Association (APA) suggests that, at least in America, the most common causes of Stress  are to do with money, work and family. Women report being more stressed than men and are twice as likely to be diagnosed with anxiety disorders. Men may also be more likely to conceal their distress. Black and Hispanic Americans, as well as poor people and parents, also report higher levels of stress. In 2015 half of Americans starting university reported being stressed most or all of the time.n 1979 Peter Nixon, a consultant at Charing Cross Hospital in London, described a “human function curve”: a moderate amount of stress, such as a deadline or race, was now understood as not just harmless, but beneficial.Recognising that stress can be beneficial seems to help in two main ways. People who have a more positive view of stress are more likely to behave in a constructive way: a study by Alia Crum of Stanford University’s Mind and Body Lab.In less extreme situations, the body and brain should react somewhat differently. When people perceive they are being challenged rather than threatened, the heart still beats faster and adrenalin still surges, but the brain is sharper and the body releases a different mix of stress hormones, which aid in recovery and learning.

Economist 5/26/16

  1. 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.
  2. 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.
  3. 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.
  4. 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.
  5. A crackdown on corruption by the government of President Xi Jinping has made it risky for officials to schmooze with businessmen over bottles of baijiu (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.

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.

Economist 4/22/15

  1. Tesco,Britain’s biggest retailer announced its financial results on April 22nd. It made the largest pre-tax loss, of £6.4 billion ($9.6 billion), in British retail history, eight times as much as the previous record, set by Morrisons last year. This was also the sixth-largest loss in the country’s corporate history. Most of it (about £4.7 billion) was accounted for by the fall in the property value of its British stores, reflecting how its out-of-town hypermarkets have fallen out of favour with consumers who shop online or use smaller convenience stores. its foreign operations are remarkably robust. Profits in Tesco’s Asian operations only fell by 15% year-on-year, and in Europe by 32%, compared to a whopping 79% for its British stores. The performance of the 3,000 or so British stores remains his biggest headache. Once the core of Tesco’s money-making machine, in the last six months of last year they hardly made any profit at all.Since early 2011 they have been losing market share, mainly to the much cheaper German-owned discount stores Lidl and Aldi.
  2. Vietnam’s 40m internet-users live in one of the better-connected countries in South-East Asia. Around 45% of Vietnamese are online (roughly the same proportion as in China). In the region, only Malaysia and Singapore have higher penetration rates. The use of social media has leapt—by two-fifths in the past year alone, according to one estimate.Vietnam patrols the internet with a relatively light touch.Facebook is the country’s most-visited website, ahead of Google’s search engine. Attempts to block it have been sporadic and half-hearted. Yet this does not mean there is free speech online. The party controls dissent by using vaguely-written laws—recently strengthened—to imprison bloggers and to impose fines on outspoken users of social media.
  3. Seven years ago the central government in Japan began allowing city residents to divert a proportion of their income-tax payments to a furusato or hometown tax of their choice. The response has been overwhelming. In the last fiscal year rural towns earned ¥14 billion ($1.2 billion) from such contributions. Some people choose a furusato not on the basis of any family ties, but simply because they like the area.Shrewd self-promotion by local governments has helped attract furusato money. Some have set up websites offering generous gifts of marbled beef, exotic seafoods and other goodies in return for a share of urbanites’ taxes. The biggest earner from the contributions, the town of Hirado in Nagasaki prefecture, has a glossy brochure of the local foods it promises to send as gifts.The central government has tried to crack down on the most lavish handouts, such as the gold ninja throwing-knives worth ¥400,000 that one city was offering in honour of its ninja spies.many towns were giving back in freebies half or even more of the value of the tax contributions they were raising.
  4. Under China’s household-registration system, known as hukou, rural connections, even if inherited, determine the kind of welfare benefits individuals may receive. Some of the first generation of migrant workers, who arrived in urban areas in the late 1980s, have reached retirement age. Most people can qualify for a state-supported or employer-backed pension scheme at 60; some women can do so at 55 or even 50. For city-born workers, that means nearly 2,070 yuan a month. But workers of rural origin receive far less—not nearly enough, in most cases, to sustain them in the cities in which they have been working. From 2008 to 2013 the number of such people over the age of 50 jumped from 26m to 41m, or from 11% to 15% of the migrant workforce. The ageing of China’s population will accentuate the problem.The minimum basic pension is 55 yuan (about $8.85) a month, far below the poverty line. The government says it increased rural pension benefits in 2014 by an average of 15 yuan per month. But increasing benefits substantially will be difficult as the ratio of pensioners to working-age migrants increases.
  5. Unlike the three Republicans who have declared so far (Marco Rubio, Rand Paul and Ted Cruz), Hillary Clinton declined to hold a rally to kick off her campaign. Instead, the former secretary of state tweeted and then uploaded a short video to a new website, in which she appeared with several Iowans who talked about their dreams for the future. After years of jet-setting, courting wealthy donors and giving $300,000 speeches, Mrs Clinton worries that she may be perceived as elitist. Smaller events, like these in Iowa, from which the press are largely excluded and at which carefully vetted regular folks are allowed to speak, help her to soften that impression. This show is necessary partly because Mrs Clinton faces no serious competition for the Democratic nomination. Mrs Clinton is thus working hard for votes that she seems assured of getting in almost any circumstances.

Economist 3/9/15

  1. THE DOWNSIDE of buying a cheap Windows computer these days is the amount of pre-installed junk it comes loaded with.None of this junkware is there for the user’s benefit. It gets installed in the factory strictly to bolster the maker’s bottom line.Some manufacturers sell “clean” versions of their computers for $20 to $30 more. Others offer to decrapify a purchased machine for an additional fee.To show its Windows operating system in the best possible light, Microsoft offers junk-free “Signature Edition” versions of many popular PCs through its online store. On average, Signature Edition PCs start up 104% faster and can be shut down 35% quicker than equivalent machines stuffed with the usual junk.That was when researchers found that some of Lenovo’s laptops sold between last September and this January contained a serious security flaw. The source: a preloaded piece of adware called Superfish—a visual search engine that captures images users see online, and then shows them adverts of similar products.Unfortunately, Superfish replaced the security certificates used by websites with a universal and easily cracked one of its own, allowing attackers to steal users’ credit-card details and other personal information.
  2. On March 2nd the New York Times revealed that when Hillary Clinton was secretary of state, she used a personal e-mail account rather than a government one for all her official business.Federal rules require all e-mails sent for government business to be stored by departments. Mrs Clinton’s evidently were not. They were in fact stored on a personal server set up in her home in Chappaqua, New York.For Republicans, the finding is politically convenient. The investigation into Benghazi had all but died for lack of anything interesting to say. The idea that Mrs Clinton may have kept back e-mails could help to revive the allegations.
  3. Federal police captured Mr Gómez on February 27th, ending one of the biggest manhunts conducted under the presidency of Enrique Peña Nieto.Servando Gómez Martínez, “El Profe”, a former primary-school teacher who became head of the Knights Templar, one of Mexico’s most ruthless drug gangs in Mexico.The drug lord’s only consolation is that five days later security forces also seized Omar Treviño Morales, the head of his gang’s biggest rival, the Zetas, in a swanky suburb of Monterrey, in northern Mexico.More than a dozen of Mexico’s worst drug lords have been captured or killed during Mr Peña’s 27-month tenure, and almost all the famous ones are now behind bars. Though the subsequent splintering of their gangs does not necessarily reduce crime.
  4. One of NATO’s founding principles was that of collective self-defence, embodied in the crucial fifth clause of the 1949 Washington Treaty. It says that “an armed attack on one or more [members] shall be considered an attack on all” and that members will assist the victim(s) of such an attack “forthwith”. Article 5 seemed something of an anachronism after the Soviet collapse.Article 5 says that the response may include armed force, but it does not mandate it. All that NATO actually promises is to take “such action as it deems necessary” to restore and maintain security.Three tricky considerations would determine the precise nature of any NATO response to foreign aggression. The first is geography: in places where an aggressor can quickly complete and consolidate an invasion, NATO’s options are very limited.A second and related problem is dealing with escalation.
  5. The Palace of Westminster is crumbling.The palace is in a bad way. In a speech on March 2nd John Bercow, the Speaker of the House of Commons, argued that it is decaying faster than it is being repaired. He claimed that fixing Parliament could cost some £3 billion ($4.6 billion). It came to only about a third more to build a new terminal at Heathrow Airport.The efficient option would be for MPs to move somewhere else while workers revamp the palace, yanking out thickets of wiring and replacing the lot, for example. But politicians do not warm to the prospect of being far from government departments.Parliament is expected to vote on the matter not long after the general election. It may consider leaving for good.

Economist 5/7/14

  1. Italy has roughly 66,000 inmates, who live in the second-most crowded conditions in Europe. Serbia, which has one-sixth the number of prisoners, is the most stuffed. Turkey, according to figures from the Council of Europe, has among the most vacant cells (despite about twice as many inmates as Italy). 
  2. Despite Peshawar’s performance, Pakistan continues to underperform in the fight against Polio. On May 5th the World Health Organisation (WHO) announced serious alarm over a major global outbreak of the disease: 74 cases reported so far this year, in eight countries. It called on Pakistan, along with Cameroon and Syria, to require all residents to be vaccinated for the disease before travelling abroad. The Peshawar strain has already cropped up around the Middle East. All the more mortifying for Pakistan is that in March India was declared polio-free. Five years ago India accounted for nearly half of all the world’s infections.
  3. In 1987 the artwork was inked onto paper with a Rotring pen (a highly precise pen with a “stylographic” point—a fine steel tubed nib, not a rollerball). The image would have been sketched first in pencil. It was not until Illustrator 88 was released a year later by Adobe Software that things like “postscript font typography” and “vector graphics” meant we could start to move away from the hand-drawn era. Today our production is almost entirely digital. Adobe Illustrator is still our preferred software. Unlike in days of yore, we can make edits right up until the final minute of production.
  4. A TERRIBLE threat stalks the streets of Washington, DC: unlicensed tour guides.  Yet he could be jailed for 90 days if caught. Washington requires all guides to pay $200 and take an exam. In the 1950s only one American worker in 20 needed a permit from the government; today that figure is around one in three. Some jobs, such as doctors, clearly need strict controls. But some states require licences for florists and interior designers. Such permits tend to cost hundreds of dollars and months of extra training.
  5. FRIENDS and foes of Hillary Clinton agree: the former secretary of state, senator and first lady is the Democrats’ default candidate for president in 2016. If she enters the contest, she will be the front-runner. Out of office, she has spent her time on charity work, lucrative speeches, receiving prizes and writing a new memoir, to be launched in June. Republicans are ready for Hillary, too. Some will remind older voters of scandals like Whitewater (involving real estate in Arkansas). But many voters have either forgotten, don’t care or were born after it happened.For all her virtues, Mrs Clinton does not make crowds swoon. Inspiring people to go out and vote will be her biggest challenge.For all her virtues, Mrs Clinton does not make crowds swoon. Inspiring people to go out and vote will be her biggest challenge.