The Economist: Daily news and views

Battle of the bulge

Mon, 13 Jul 2009 11:03:49 GMT

Obesity levels in America in 1998 and 2008

IT MAY be time to hide the cookie jar. Over 26% of Americans are obese, with a weight to height ratio (or body mass index) of over 30, according to the Centres for Disease Control and Prevention, a government body. Over the past ten years, waistlines have expanded in every state. In 1998 most states had a relatively trim population, with fewer than a fifth of adults obese. But since then the scales have tipped in the other direction. Now at least a quarter of adults in 32 states are obese. Mississippi is the fattest of all, with a third of its residents considered obese.

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A new political mould

Mon, 13 Jul 2009 09:27:42 GMT

Serbia's nationalist party has modernised

The Serbian Progressive Party (SNS), a more moderate offshoot of the extreme nationalist Serbian Radical Party (SRS), has eclipsed its parent and stands level in opinion polls with President Boris Tadic’s Democratic Party (DS), which dominates the national government. Allied to other legal changes, the SNS and DS now look poised to dominate national politics, creating a two-party system that holds out the prospect of more stable and coherent governments, of either liberal pro-EU or nationalist complexion.

Belgrade and its municipalities have customarily been DS strongholds but municipal elections in the first half of June gave victory in the districts of Zemun and Vozdovac to the SNS, which is led by former SRS presidential candidate, Tomislav Nikolic, who broke with the SRS in October of last year. On July 8th it was reported that the SNS was poised to begin coalition talks in the two districts with the Socialist Party of Serbia, thus bringing an end to DS rule in the district. ...

Taro's last card

Mon, 13 Jul 2009 08:41:47 GMT

Japan’s beleaguered prime minister calls an election

SINCE becoming Japan’s prime minister last September, Taro Aso has resisted calls to hold an early election. But the clamour from both his own team, the ruling Liberal Democratic Party (LDP), as well as the opposition Democratic Party of Japan (DPJ), became too loud to ignore. The LDP suffered a striking defeat in municipal elections in Tokyo on Sunday July 12th and, facing an open revolt from his own party, Mr Aso finally succumbed.

On Monday Mr Aso decided to call an election on August 30th to select members of the lower house of Japan’s Diet (parliament), which he plans to dissolve next week. The decision should quell moves from within the LDP to boot him out. But the decision could result in the ousting of the LDP; the party has governed Japan for more than 50 years. ...

Lines in the sand

Mon, 13 Jul 2009 07:57:33 GMT

Climate change could ignite wars in volatile regions

THE Matterhorn, an iconic emblem of the Alps, has two peaks: one on its Swiss side and one on its Italian side. Between them, the boundary separating the two countries traces the mountain ridge until it reaches the glacier at its base. According to a convention agreed long ago between Switzerland and Italy, the ridge of the glacier marks the border between the two countries. But the glacier is now receding, so a draft agreement has been proposed to create a new border that coincides with the ridge of the underlying rock.

The proposed change to this particular international border is unlikely to result in war. As the world warms up, however, more and more countries will need to renegotiate their boundaries. Your correspondent is concerned that a peaceful outcome is by no means assured. ...

Behind Chinese walls

Mon, 13 Jul 2009 07:14:27 GMT

The detention of Rio Tinto employees in China has worrying implications

THE detention of four executives of Rio Tinto, an Anglo-Australian mining giant, has transformed an industrial spat to a big test of how China intends to pursue its economic objectives. It has also sent a shudder through Chinese employees of Western companies in any area that is deemed important to the country’s welfare.

News only began to emerge on Tuesday July 7th though the government picked up Rio’s employees two days beforehand. After nearly a week details still remain sketchy. Despite the government’s being barraged by inquiries, there has yet to be any official comment. The scant information that has emerged has appeared in local publications believed to have access to government sources, and to announcements by Rio Tinto and the Australian government. The latter pair say they are mystified by what has unfolded. A worker at a large steel company, Shougang Group, has also been detained. Many others may have been questioned. ...

The week ahead

Sun, 12 Jul 2009 05:29:21 GMT

The aftermath of riots in western China, and other stories

• VICIOUS riots in Urumqi, the capital of the autonomous province of Xinjiang, caused the deaths of over 150 people. It was the bloodiest known incident of unrest in China since the massacre that ended the Tiananmen Square protests in 1989. The violence embarrassed China’s president, Hu Jintao, into skipping the G8 summit in Italy. The authorities responded by imposing a curfew on Urumqi, closing mosques, sending soldiers on to the streets and detaining hundreds of people. China’s leaders may fear that several smaller incidents that have occurred since the main rioting are the prelude to bigger confrontations caused by tension between Han migrants and (mostly) Muslim Uighurs.

For background, see article ...

Orientalist art

Sat, 11 Jul 2009 09:53:31 GMT

Bidding rewards the brave

The market for Orientalist art has always been uneven. In the early 1980s prices soared for 19th-century pictures by European artists of deserts and camels and falcons and fairs. Works by Lord Leighton and John Frederick Lewis, so unfashionable in the 1960s, earned stratospheric sums. Then they tumbled, first in the early 1990s and then again now.

Christie’s Orientalist sale in London on July 9th did not go well. Of the 59 lots on offer, 27 failed to sell despite every effort by the auctioneer, Alexandra McMorrow, to squeeze bids out of those attending. It was an afternoon of thin trading, with reluctant bidders and bargain-hunting buyers. The entire sale was despatched to just 14 purchasers. ...

This week's top stories [10 July 2009]

Fri, 10 Jul 2009 13:00:36 GMT

Our top articles ranked by reader popularity.

Living on scraps

Fri, 10 Jul 2009 11:37:54 GMT

As General Motors emerges from bankruptcy the worst may be over for carmakers

CALL them green fumes. Sales of cars and trucks in America showed their smallest year-on-year decline last month since September, when Lehman Brothers crashed—although the drop was still a massive 31%. That would correspond to annual sales of 9.7m. But according to General Motors, the first three weeks of the month were a good deal better, running at a rate of 10.3m. Sales subsequently slowed as some customers held back in anticipation of the federal “cash-for-clunkers” scheme, which began this month.

Such incentives appear to be working well. Although the American scrappage incentives apply from July 1st, buyers may hold back until the details of the plan are finalised later in the month. That could turn out to be more good news for GM. Judge Robert Gerber has allowed the “new” GM to acquire the good assets of “old” GM. And on Friday July 10th, following the example set by Chrysler’s fast-track exit, GM too emerged from Chapter 11 after a mere 40 days. Having lost nearly two percentage points of market share during the bankruptcy proceedings, the new GM is planning a marketing blitz next month to announce its resurrection. ...

A faltering format

Fri, 10 Jul 2009 11:01:50 GMT

Is the DVD dying?

TEN years ago DVDs rejuvenated the film business, encouraging people to own films rather than simply watch them. But sales, which began declining gradually in 2006, are now falling more steeply. Around a third of the drop in the first quarter was counteracted by rising sales of high-definition Blu-ray discs, which are more profitable. Meanwhile, rentals are booming. Redbox, which rents films cheaply from self-service kiosks, has been adding machines at the rate of more than 500 per month. For the studios it is much more profitable to stream a film digitally or sell it through a cable operator as a video-on-demand (VOD).

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Are we nearly there yet?

Fri, 10 Jul 2009 07:43:01 GMT

Motorists could learn a thing or two from ants

WITH more Americans than ever economising by driving, rather than flying, to visit friends and family for last weekend’s Independence Day celebrations, the long, winding lines of bumper-to-bumper traffic must have made more than a few turn around and miss the food and fireworks. When stuck in traffic, your correspondent is tempted to compare the competitive nature of motorists (himself included) with the co-operative behaviour of ants. He is intrigued by the way ants manage to avoid traffic jams. The first thing you notice when you watch an ant trail is the way the convoy never comes to a halt, no matter how busy the traffic.

The ants don’t even slow down. As the traffic density builds at junctions where ant trails converge, they continue to maintain the same steady speed as they do on quieter stretches. More intriguing still, they exhibit none of the mutual blocking behaviour found on crowded roads—where motorists prevent others from squeezing in and, in so doing, hinder their own progress as well. ...

Still vulnerable

Fri, 10 Jul 2009 07:37:12 GMT

Pakistan's economy remains in bad shape, despite emergency help from the IMF

Pakistan has averted an economic crisis, at least in the short term, thanks primarily to the disbursement of emergency financing from the IMF. In recent weeks several macroeconomic data releases have shown that the economy has stabilised. However, the Economist Intelligence Unit believes that the government's goal of improving economic stability will be severely compromised not only by the unfavourable international economic environment but also by a range of domestic factors.

Less than a year ago, Pakistan faced a balance-of-payments crisis and runaway inflation. The IMF stepped in, offering a US$7.6bn emergency financing package in late 2008 that forestalled an economic meltdown. According to the organisation, progress since then has been good overall. In the first formal review of Pakistan's arrangement with the IMF, in February, the Fund asserted that "the initial success in stabilising the economy augurs well for the future, despite the risks associated with the deterioration in the global economy". An IMF report in late June confirmed this relatively optimistic assessment. ...

A modest step

Fri, 10 Jul 2009 07:20:10 GMT

World leaders aspire to limit climate change, but they offer few details of how to do so

SCEPTICS could refer to an old joke about a music lover who would do anything to play the violin—except practice. The countries that emit 80% of the world’s heat-trapping gases, gathered at the Group of Eight (G8) meeting in the earthquake-stricken city of L’Aquila, in Italy, agreed on a goal this week. But they failed to say how they intended to achieve it.

The United States, Canada, Japan and Russia for the first time have put their names to a G8 declaration endorsing a position on the climate already taken by the European Union. This sets out that global temperatures, which already rose by 0.7ºC in the 20th century, should not be allowed to rise by more than 2ºC compared with pre-industrial levels. In addition, eight other countries, broadly representing the developing world at the conference, signed up to the target. ...

Losing ground

Thu, 09 Jul 2009 11:22:28 GMT

Although Microsoft still dominates the internet browser market, its strength is waning

GOOGLE'S announcement of a new web-based operating system is the latest salvo at its biggest rival, Microsoft. Chrome OS will be combined with the company's browser, Chrome, which it launched nine months ago. By May its share of the consumer-browser market had grown to 1.8%, according to Net Applications, a web analytics firm. Microsoft Internet Explorer still has the lion's share, at around 66%, though this has fallen from nearly 80% two years ago. But these numbers only show what kind of browsers pople use on the public internet. On corporate networks, Microsoft reigns supreme, boasting a share of more than 90%, according to some estimates.

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Of mice and monkeys

Thu, 09 Jul 2009 11:19:16 GMT

How to extend your life by a decade or two

MOST people accept that death and taxes are inevitable. But that doesn’t mean you should not try to postpone them. A good accountant can help with the latter, but the usual prescription for the former is a way of life that avoids excess.

That advice might be even truer than many of its proponents realise, for it has long been known that restricting the diets of several species of laboratory animal seems to slow down the process of ageing. This is a question not just of avoiding obesity, but of reducing an individual’s intake of calories to a point significantly below normal consumption—almost, but not quite, to the point of malnutrition. At the same time, some drugs are also known to have anti-ageing properties—again, in “lower” animals. It is therefore good news for potential Methuselahs that both these approaches have now been brought closer, phylogenetically speaking, to humanity. ...

Partners in crime

Thu, 09 Jul 2009 07:30:46 GMT

Despite Russia's protests, Stalin was no less villainous than Hitler

IT IS depressing that it even needed to be discussed. On July 3rd in Vilnius the parliamentary assembly of the Organisation for Security and Cooperation in Europe (OSCE), the continent’s main outfit, passed a resolution equating Stalin and Hitler. It called for August 23rd to become an official day of remembrance for the millions who were repressed, murdered, deported, robbed and raped as a result of the infamous Molotov-Ribbentrop pact between Nazi Germany and the Soviet Union. That deal, and the secret protocols that went with it, were a death sentence for the countries from the Baltic to the Black sea. The poisonous after-effects linger until today.

The resolution should have met with particularly thunderous applause from the Russian side. After all, Russians by most measures suffered particularly badly under Stalin. Following Lenin’s terrible legacy, he systematised the persecution of the country’s brightest and best. Anyone reading the classic memoirs of Stalinism, such as “Kolyma tales” by Varlam Shalamov, or Nadezhda Mandelstam’s “Hope against hope”, or a modern history such as Anne Applebaum’s “Gulag”, is suffused with the horror of those years. It is hard to imagine anyone quibbling over their condemnation. ...

Head ban?

Thu, 09 Jul 2009 06:21:34 GMT

Liberia's president comes under fire

Liberia's Truth and Reconciliation Commission has called for the president to be banned from office. The head of state is likely to face parliamentary pressure to step down, but she remains popular with ordinary Liberians—for now.

Opposition groups have called for the resignation of Liberia's president, Ellen Johnson-Sirleaf, after the country's Truth and Reconciliation Commission (TRC) said that she should be barred from office for 30 years for backing a rebellion led by the former head of state, Charles Taylor. The TRC was set up in early 2006, and tasked with investigating cases of human-rights abuses committed under previous regimes. It has already recommended that some of those responsible for gross violations of human-rights law, international humanitarian law and domestic law should be prosecuted (the chief exception being former child soldiers), and that public institutions be reformed to carry out its recommendations and contribute to conflict prevention. ...

The ashes

Wed, 08 Jul 2009 11:17:53 GMT

Australia loses one battle of the ashes

HOW the dead are disposed of varies widely by country. Custom and religion limit the use of cremation in many places. It is forbidden in Islam and frowned upon by many Jews, but generally practised in Buddhism and Hinduism. Since the Catholic church lifted a ban on cremations in 1963 it has also become an easier choice for some Christians to make. The availability of land for burial may matter too. In densely populated Japan and Hong Kong cremation is a common choice. That may also explain why the British are keener than Australians on cremations.

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Clash of the titans

Wed, 08 Jul 2009 09:18:28 GMT

Google launches a direct assault on Microsoft with the promise of a new PC operating system

THE announcement came as a humble blog post on Google’s corporate website late on Tuesday July 7th, but it delivers what is likely to be a dramatic shake-up for the information-technology (IT) industry. By promising to release, at some point later this year, an operating system for personal computers the online giant is launching a direct attack on Microsoft, the world’s biggest software firm.

The confrontation is likely to be momentous. Microsoft’s PC operating system, Windows, boasts a market share of nearly 90%. Although the firm’s empire has been showing signs of decline, it remains a dominant power. Yet industry watchers see a huge threat as the mighty internet company moves into new territory. TechCrunch, a leading technology blog, made it clear how vulnerable it believes Microsoft to be, reporting the news as “Google Drops A Nuclear Bomb On Microsoft”. ...

Clash of the titans

Wed, 08 Jul 2009 09:18:28 GMT

Google launches a direct assault on Microsoft with the promise of a new PC operating system

Selling BEE

Wed, 08 Jul 2009 06:55:50 GMT

South Afican Breweries announce a deal to get more black ownership of capital

Brewing group SAB has announced a major empowerment deal at a time when others are struggling because of the economic downturn. Empowerment will remain a challenge in the current environment, but will also create new opportunities for compliant firms.

South Africa's economic downturn has halted several Black Economic Empowerment (BEE) transactions, but brewer SAB—part of SABMiller, the world’s second-largest brewing group—has unveiled a new broad-based BEE deal that does not rely on debt financing, and so is unlikely to face any substantial hitches. SAB already scores well in terms of BEE—which aims to redress the iniquities of the apartheid era by gradually transferring economic power from racial minorities to the black majority—but has not previously tackled the equity component. Now, however, SAB will allocate a 10% stake in its South African operation, valued at R6bn (US$752m), to three main groups: 20% to a new SAB Foundation, 40% to the firm’s 9,000 workers (of whatever race) and 40% to retailers engaged in selling the firm’s beverages. ...

Rumbling on

Tue, 07 Jul 2009 12:33:20 GMT

Another round of ethnic violence in Urumqi as Han Chinese and Uighurs clash

THE city of Urumqi was an ethnic tinderbox on Tuesday July 7th. Two days after rioting in the provincial capital of China’s western Xinjiang region had left at least 156 people dead and more than 1000 injured, tensions flared anew. Urumqi is home to 2.3m people, a majority of them Han Chinese, many of whom have lived here for generations, and a minority of them Uighurs, Xinjiang’s mostly Muslim indigenous Turkic population.

Screaming in anger about the weekend unrest, thousands of Han Chinese marched through the centre of Urumqi on Tuesday afternoon, wielding a variety of makeshift and menacing weapons, including clubs, meat cleavers, long knives, axes and bricks. “This is no longer an issue for the government!” said an employee of the Tian Bai Commercial Plaza, wooden club in hand. “This is now an ethnic struggle between Uighur and Han. It will not end soon, and we Han will do what we must to protect ourselves”, he said. ...

Big spender

Tue, 07 Jul 2009 11:44:43 GMT

India's new budget increases spending, but does not explain where the money will come from

On July 6th India's finance minister, Pranab Mukherjee, unveiled the recently re-elected government's budget for the 2009/10 fiscal year (April-March). The budget focuses squarely on spurring growth through fiscal stimulus and higher infrastructure spending. It also dramatically increases outlays on welfare and job-creation programmes, particularly in rural areas. This agenda, which rewards the electorate for Congress's unexpectedly sweeping victory at the polls, is politically astute. But its economic wisdom is somewhat questionable, as it will also exacerbate India's already-alarming budget deficit and disappoint hopes for much-needed liberalising reforms.

In his budget speech, Mr Mukherjee emphasised that the government faces two challenges: to return to annual GDP growth of 9% as soon as possible, and to ensure that growth produces "inclusive development" by improving the livelihoods of the poor. Accordingly, the budget focuses on rural development, significantly increasing spending on debt relief, agricultural lending, and subsidies for farm inputs and food. The government will also pump nearly Rs400bn (US$8.3bn)—a year-on-year increase of 144%—into the National Rural Employment Guarantee programme, a flagship development scheme that promises each rural family 100 days of work on public-sector projects. A smaller scheme to provide basic food and shelter for the urban poor was also expanded. ...

Depleting stockpiles

Tue, 07 Jul 2009 11:18:07 GMT

Russia and America have far fewer nuclear weapons than they once did

ON MONDAY July 6th, Barack Obama and Dmitry Medvedev, the presidents of America and Russia, concluded negotiations in Moscow with an agreement to trim their countries' nuclear arsenals. Under the new accord, Russia and America will reduce the number of strategic warheads to between 1,500 and 1,675 each within seven years of a new treaty being signed, probably by the end of the year. This replaces their current obligations under a 2002 treaty to cut warheads to between 1,700 and 2,200 by 2012. Russia has almost 2,800 strategic warheads at present, 600 more than America. While these are still deadly enough to destroy most living things, stockpiles have shrunk to a fraction of their cold war peaks.

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Good to great to gone

Tue, 07 Jul 2009 08:54:41 GMT

Jim Collins, a management guru, ponders business failure

ONE of the keys to being an inspirational management speaker is not to dwell too long on the negative. No wonder Jim Collins is almost apologetic in his new book on corporate failure, “How the Mighty Fall”. As he writes, “When I sent a first draft of this piece to critical readers, many commented that they found our turn to the dark side grim, even a bit depressing.” Happily, he reaches an upbeat, empowering conclusion: “Whether you prevail or fail, endure or die, depends more on what you do to yourself than on what the world does to you.” He expands on this theme by quoting Winston Churchill’s injunction to “Never give in, never give in, never, never, never, never...”

The risk for a management guru with a sunny outlook is that writing books praising companies creates hostages to fortune. One well-known title, “In Search of Excellence”, left its authors wiping egg from their faces when many of the firms they profiled quickly proved to be anything but excellent. Even worse was Gary Hamel’s celebration of Enron, “Leading the Revolution”, which was still arriving in bookstores when the energy-trading company blew up in 2002. ...