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The Economist - Leaders  
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   ISSN (Online) 1358-274X
   Published by The Economist Group Homepage  [4 journals]
  • Private equity in Africa: Unblocking the pipes
    • Abstract: HOUSED until recently behind a German beer garden in a shopping mall, Namibia’s stockmarket has just a handful of actively traded stocks. Its low profile is not unusual for Africa: the continent’s public markets are mostly small and illiquid. That is not the only reason why entrepreneurs find it hard to raise capital. Pension schemes, which provide long-term capital elsewhere, have been looted or repressed in many countries and are thus rarely viable investors. And local banks are failing to meet demand for affordable loans. Banking penetration is low and, with most households keeping their savings under the mattress, banks cannot recycle deposits into loans. Moreover, many were nationalised in the 1970s and have been poorly run since, often treated as piggy-banks by politicians.Africa is desperately short of investment, both from locals and international investors: an extra $90 billion a year is needed for infrastructure, never mind other businesses. This is throttling development. Infrastructure bottlenecks alone are thought to cut growth in sub-Saharan Africa by two percentage points a year. But many of the normal routes by which capital gets...
      PubDate: Thu, 22 January 2015 15:23:26
  • Nigeria and Boko Haram: The black flag in Africa
    • Abstract: IS BOKO HARAM becoming Africa’s Islamic State? In its bloodlust and ambition to hold territory, it certainly resembles the jihadists in Iraq and Syria. Boko Haram has carved out a “caliphate” the size of Belgium in the impoverished north-eastern corner of Nigeria. And like IS, it is exporting jihad across post-colonial borders (see article).What started as a radical but mostly political movement in 2002 has turned, especially since a heavy-handed crackdown in 2009, into a jihadist insurgency that has grown more violent every year. In April 2014 it abducted 276 girls from the town of Chibok. Some fled, some died, and many were sold into slavery or forced to “marry” fighters. Now the uprising is spreading to other countries. A week ago, 80 Cameroonians were kidnapped. Chad is sending troops to help Cameroon; Niger and Benin also feel threatened.In the same week the world was outraged by jihadist attacks in Paris that killed 17 people, little attention was paid to news that as many as 2,...
      PubDate: Thu, 22 January 2015 15:23:26
  • The sea: How to catch the overfishermen
    • Abstract: OVERFISHING is reaching catastrophic levels. According to a recent study, stocks of the biggest predatory species, such as tuna and swordfish, may have fallen by 90% since the 1950s. Another study, published last week in Science, suggests extinction is on the cards for many species. This matters for numerous reasons, not the least of which is that a lot of people rely on fish as part of their regular diet. About 3 billion of the Earth’s inhabitants get a fifth or more of their protein from fish—which means that fish are a bigger source of the stuff than beef is.The difficulty is, in part, a consequence of the problem known as the tragedy of the commons, whereby a commonly held resource is over-exploited. Nobody owns the high seas, which are therefore vulnerable to a perfectly legal free-for-all. But a lot of fishing is carried out in territorial waters that stretch 12 nautical miles from a country’s coastline, as well as so-called exclusive economic zones that stretch to 200 nautical miles beyond coastlines, over which a more limited sovereignty exists. Governments, in thrall to fishing lobbies which are more concerned with making money...
      PubDate: Thu, 22 January 2015 15:23:26
  • Freedom of speech: First—and last—do no harm
    • Abstract: THE march in Paris after the massacre at Charlie Hebdo was supposed to display international solidarity over the right of free expression. In retrospect, it was a pageant more of hypocrisy than of principle. The Russian foreign minister’s attendance did not stop two of his countrymen being prosecuted in Moscow for holding Je Suis Charlie placards. His Saudi Arabian counterpart apparently saw no contradiction between the parade and the public flogging of a blogger in Jeddah two days before. Turkey is a champion locker-up of journalists, but its shameless prime minister turned up all the same. Meanwhile, somewhat misconstruing the point, in the name of modesty an Israeli ultra-Orthodox publication photoshopped the female leaders from its coverage.Terrorism was the main issue in the Paris attacks, which targeted a kosher shop as well as a magazine. But the subsidiary row they ignited—about the parameters of free speech—has been stoked rather than soothed by their aftermath, and continues to roil the world (see...
      PubDate: Thu, 22 January 2015 15:23:26
  • Education and class: America’s new aristocracy
    • Abstract: WHEN the candidates for the Republican presidential nomination line up on stage for their first debate in August, there may be three contenders whose fathers also ran for president. Whoever wins may face the wife of a former president next year. It is odd that a country founded on the principle of hostility to inherited status should be so tolerant of dynasties. Because America never had kings or lords, it sometimes seems less inclined to worry about signs that its elite is calcifying.Thomas Jefferson drew a distinction between a natural aristocracy of the virtuous and talented, which was a blessing to a nation, and an artificial aristocracy founded on wealth and birth, which would slowly strangle it. Jefferson himself was a hybrid of these two types—a brilliant lawyer who inherited 11,000 acres and 135 slaves from his father-in-law—but the distinction proved durable. When the robber barons accumulated fortunes that made European princes envious, the combination of their own philanthropy, their children’s extravagance and federal trust-busting meant that Americans never discovered what it would be like to live in a country where the elite could reliably reproduce...
      PubDate: Thu, 22 January 2015 09:33:09
  • Counter-terrorism: Going dark
    • Abstract: OVER the past decade Western security agencies have been remarkably successful in keeping jihadist terrorists at bay. Put it down to diligence, surveillance technology, financial resources, the manageable numbers of potential terrorists and, often, good luck. The spooks have foiled complex plots, such as the one in 2009 to bring down airliners in mid-Atlantic. They have brought a steady stream of would-be terrorists before the courts. Occasionally, loners and misfits have succeeded in carrying out attacks, such as the bombing of the Boston marathon and the beheading of a British soldier in London, both in 2013. But until the murders in Paris last week, most people would have had Islamist terrorism low on their list of concerns. But counter-terrorism is getting harder for three reasons.The first is a consequence of the collapse of several Arab countries, above all the unending civil war in Syria and the rise of Islamic State (IS). This week, the head of the European police agency estimated that up to 5,000 European Union citizens had joined the jihadists’ ranks, many of whom would return home as hardened fighters. Furthermore, the ascendancy of IS has presented a...
      PubDate: Thu, 15 January 2015 14:51:47
  • Lessons from Haiti’s earthquake: A march around the institutions
    • Abstract: FEW countries have suffered an earthquake so devastating, or have been less prepared for such a calamity. The quake that struck Haiti on January 12th 2010 killed perhaps 200,000 people—no one is sure how many—left 1.5m homeless and caused economic damage equivalent to 120% of the country’s GDP. A cholera epidemic compounded the misery. These disasters called forth the biggest-ever outpouring of humanitarian relief, worth some $9.5 billion in the first three years after the quake. The well-wishers vowed, in the words of Bill Clinton, who helped co-ordinate their early efforts, to “build back better”. Yet five years later, the country is little better off than it was before the disaster—and in some ways it is worse.The most visible devastation has largely been cleared away. Only about 85,000 people are still stuck under plastic in displacement camps. But many of the rest have moved to makeshift dwellings in slums without sanitation. Port-au-Prince, the overcrowded capital of an over-centralised country, is more jammed than ever. If another earthquake hits, the death toll might be even higher. Corruption, shoddy infrastructure and political instability discourage...
      PubDate: Thu, 15 January 2015 14:51:47
  • Sri Lanka’s new president: An auspicious moment
    • Abstract: SRI LANKA’S astrologers are probably not among those celebrating the country’s election result. It was after consultation with some of their profession that Mahinda Rajapaksa, the president, called an election for January 8th 2015, two years ahead of schedule. This turned out to be a big mistake. Mr Rajapaksa had ruled since 2005 and, along with his family, several members of which occupied the country’s most powerful posts, had given the impression of settling into power for eternity. To his astonishment, his countrymen did not relish this prospect and turfed him out. He seems to have explored the possibility of a coup, but the attorney-general, chief justice and, crucially, the army, were not game.For Sri Lankans, Mr Rajapaksa’s defeat is excellent news. It is a triumph for democracy after a long drift towards corrupt authoritarianism. The new president, Maithripala Sirisena (pictured), is the first leader in two decades to have the backing of Tamils and Muslims as well as a large number of the country’s Sinhalese majority (see article)....
      PubDate: Thu, 15 January 2015 14:51:47
  • The sliding euro: Heading for parity
    • Abstract: THIS week marked a milestone in the history of Europe’s single currency. On January 14th the value of the euro slipped to $1.17, the rate at which it was introduced on January 1st 1999. Back then, the fledgling currency weakened fast, hitting parity with the dollar in early 2000 and plunging to $0.83 by October of the same year. The slump in the euro’s value suited no one: the European Central Bank (ECB) worried about inflation from rising import prices; other countries fretted about declining competitiveness. So the world’s big central banks undertook a programme of co-ordinated intervention to stem the euro’s fall.This time round the euro’s slide has been more gradual, but it is likely to prove more persistent. Parity with the dollar is quite plausible this year. Both politics and economics are undermining the currency.The immediate threat is from the political side—and uncertainty about the consequences of the Greek elections on January 25th. The damage of Grexit, though lower than in 2012, would still be huge (see...
      PubDate: Thu, 15 January 2015 14:51:47
  • Energy: Seize the day
    • Abstract: MOST of the time, economic policymaking is about tinkering at the edges. Politicians argue furiously about modest changes to taxes or spending. Once in a while, however, momentous shifts are possible. From Deng Xiaoping’s market opening in 1978 to Poland’s adoption of “shock therapy” in 1990, bold politicians have seized propitious circumstances to push through reforms that transformed their countries. Such a once-in-a-generation opportunity exists today.The plunging price of oil, coupled with advances in clean energy and conservation, offers politicians around the world the chance to rationalise energy policy. They can get rid of billions of dollars of distorting subsidies, especially for dirty fuels, whilst shifting taxes towards carbon use. A cheaper, greener and more reliable energy future could be within reach.The most obvious reason for optimism is the plunge in energy costs. Not only has the price of oil halved in the past six months, but natural gas is the cheapest it has been in a decade, bar a few panicked months after Lehman Brothers collapsed, when the world economy appeared to be imploding. There are growing signs that low prices are here to stay: the...
      PubDate: Thu, 15 January 2015 09:33:13
  • China: Off target
    • Abstract: THE photographs of a mother lying next to a naked newborn baby in a county hospital in northern China could have been mistaken for a joyous occasion. Closer inspection showed that the baby was dead, killed in her mother’s womb in a forced abortion supervised by officials who had held her down. The infant was just a couple of months from term. Our picture shows the mother only; that with the baby is too gruesome to print. When the woman’s family published the pictures online they went viral, sparking a furious debate about the country’s one-child-per-couple policy and the way its rigid mandates had incentivised local bureaucrats to take a life (see article).Autocratic regimes can oppress their citizens without performance targets, and performance targets are not necessarily a bad idea. Many well-run companies and governments put them to good use. But the combination of autocracy and targets is a dangerous one because officials are likely to place hitting their numbers above other considerations, such as...
      PubDate: Thu, 08 January 2015 14:26:04
  • Libya: The next failed state
    • Abstract: FOUR years after the beginning of what is now called the Arab spring only in a tone of bitter irony, almost all the countries involved are in a dire state. The sole exception is tiny Tunisia. For a while, things seemed to be improving in its sprawling oil-rich neighbour, Libya, too. But Libya is slipping fast—and its chaotic decline, like that in Syria, is already drawing in outsiders and posing a threat to the West.Nowadays Libya is barely a country at all (see article). The factions that came together to fell Muammar Qaddafi have given up trying to settle their differences by negotiation. The east is under the control of a more or less secular alliance, based in Tobruk; in the west, a hotch-potch of groups in Tripoli and Misrata, once the symbol of heroic resistance to Qaddafi, hold sway, backed by hardline Islamist militias. Libya has two rival governments, two parliaments, two sets of competing claims to run the central bank and the national oil company, no functioning national police or army, and an array of militias that terrorise the country’s 6m citizens, plunder what remains of the country’s wealth, ruin what little is left of its...
      PubDate: Thu, 08 January 2015 14:26:04
  • Dependency on commodities: What Vlad can learn from Chad
    • Abstract: COMMODITIES are sirens: alluring, yet dangerous. When prices are high, politicians in commodity-exporting countries rejoice. Proceeds from the export of oil, gas and metals fill state coffers. Foreign cash floods in and well-paid jobs are created. Such countries’ governments often neglect other parts of the economy, believing that the good times will never end. But they always do.As commodity prices tumble, many countries are learning what happens when an economy is too reliant on natural resources. Venezuela, with the world’s largest oil reserves, is on the verge of defaulting. Brazil and Norway, two other big oil exporters, have seen their growth forecasts cut. The Russian president, Vladimir Putin, will watch his economy shrink by 5% in 2015, according to central-bank estimates. His government’s debt is likely to be downgraded to “junk” status.When commodity prices started to fall in 2014, economists feared the worst for other commodity exporters, but so far many have surpassed expectations. Only a handful of Latin American countries—Argentina, Venezuela and possibly Brazil—will fall into recession in 2015. Others have seen growth forecasts trimmed...
      PubDate: Thu, 08 January 2015 14:26:04
  • Economics evolves: A long way from dismal
    • Abstract: IN THE world of economics, macroeconomists have had all the kudos. As designers of economy-wide models, they provide the house-price and interest-rate forecasts that fuel dinner-party talk. Many hold power, twiddling the dials of tax and spending in finance ministries, or shifting the monetary levers at central banks. Others grab the riches that banks and hedge funds offer. The natural order is, however, changing. Not only have macroeconomists been embarrassed by a decade of failed predictions, but they are also losing their edge. For anyone starting out in economics, the future is micro (see article).Microeconomists are a humble bunch. Rather than seeking a unified theory of everything, they hone in on a particular area, often a single type of market or firm, and try to find out how it works. But technology is lending them clout. Armed with vast data sets produced by tech firms, microeconomists can produce startlingly good forecasts of human behaviour. Silicon Valley firms have grown to love them: by bringing...
      PubDate: Thu, 08 January 2015 14:26:04
  • The attack on Charlie Hebdo: Terror in Paris
    • Abstract: THE latest issue of Charlie Hebdo, a satirical French magazine, spotlights Michel Houellebecq, author of a new novel that imagines the Islamisation of France and then the European Union. Critics had denounced Mr Houellebecq’s book (see article), which depicts a near future in which Islamists win France’s presidency and compromise its freedoms, as Islamophobic scaremongering. Then, on the day of its publication, masked gunmen attacked Charlie Hebdo’s offices in Paris. They yelled “Allahu Akbar” as they murdered 12 people and wounded others, in France’s worst terrorist attack for half a century (see article). The gunmen fled; police have named two brothers as suspects. As anti-immigrant sentiment—especially the anti-Muslim kind—seeps across Europe, from street protests in Dresden (see...
      PubDate: Thu, 08 January 2015 09:33:15
  • America and Cuba: The new normal
    • Abstract: MARCO RUBIO, a prospective Republican candidate for the White House, called it “a victory for oppressive governments the world over”. Only “the heinous Castro brothers, who have oppressed the Cuban people for decades” will benefit, thundered Jeb Bush, a likely rival, who is also based in Florida. The object of their fury: Barack Obama’s startling decision to loosen America’s 54-year-old embargo on Cuba.Cuba’s Communist government is indeed oppressive, while the Castro brothers can fairly be called heinous and will probably do all they can to maintain control. Raúl Castro, who took over from Fidel in 2008, has said he will step down in 2018, but that is not a prelude to free elections. Nonetheless, easing the embargo is the right thing to do. The measures that Mr Obama and Mr Castro announced on December 17th—including a deal to restore diplomatic relations and the liberalisation of travel and remittances—will do much to normalise a relationship that has been trapped in the sterile logic of the cold war. But its significance goes beyond that. The embargo warps the United States’ relations with other Latin American countries, as well as their relations with one...
      PubDate: Tue, 30 December 2014 14:58:10
  • Sri Lanka: Last days of the Raj?
    • Abstract: WHEN he called a presidential election for January 8th, two years before he had to, Percy Mahinda Rajapaksa must have been confident of victory. Provincial elections had shown that his once unassailable popularity was waning. But the opposition was fractured, the economy was doing well and incumbency bestows benefits, both legitimate and nefarious. Mr Rajapaksa, who fosters myths that portray him as the reincarnation of a great king from Sri Lanka’s south, seems to have expected re-anointing. Something close to the 57% vote share which saw him re-elected to a second term in 2010 seemed achievable. Now, barring outlandish rigging, it would be a surprise. Mr Rajapaksa may still, just, be the favourite (see article). But the contest will be very close-fought.Mr Rajapaksa’s popularity has rested on his role in ending Sri Lanka’s 26-year civil war, with the rout in 2009 of the Tamil Tigers, a vicious, fascistic group but one that represented the opposition of the largely Hindu Tamil minority to discrimination favouring...
      PubDate: Tue, 30 December 2014 14:58:10
  • Hacking corporate networks: Losing the plot
    • Abstract: THE cyber-attacks that have emerged in recent weeks have begun to sound like a screenplay. One unknown adversary destroys a German blast furnace by interfering with the computers that control it. An attack by the “Guardians of Peace” on Sony Pictures wipes its computers, loots its intellectual property and humiliates its bosses by publishing their private e-mails (see article). Another group called Lizard Squad ruins Christmas for millions by swamping video-game networks.But these attacks were all too real, and reality is messier than fiction. Businesses and governments now face troubling questions. The Federal Bureau of Investigation quickly blamed North Korea for the attack on Sony, which had made a comedy featuring the assassination of that country’s leader. Barack Obama vowed retaliation, and North Korea’s internet connection has since crashed twice.  But the evidence produced was weak. Many computer-security experts think it more likely the culprits were disgruntled employees, gangsters or pranksters. It...
      PubDate: Tue, 30 December 2014 14:58:10
  • The on-demand economy: Workers on tap
    • Abstract: IN THE early 20th century Henry Ford combined moving assembly lines with mass labour to make building cars much cheaper and quicker—thus turning the automobile from a rich man’s toy into transport for the masses. Today a growing group of entrepreneurs is striving to do the same to services, bringing together computer power with freelance workers to supply luxuries that were once reserved for the wealthy. Uber provides chauffeurs. Handy supplies cleaners. SpoonRocket delivers restaurant meals to your door. Instacart keeps your fridge stocked. In San Francisco a young computer programmer can already live like a princess.Yet this on-demand economy goes much wider than the occasional luxury. Click on Medicast’s app, and a doctor will be knocking on your door within two hours. Want a lawyer or a consultant? Axiom will supply the former, Eden McCallum the latter. Other companies offer prizes to freelances to solve R&D problems or to come up with advertising ideas. And a growing number of agencies are delivering freelances of all sorts, such as and Elance-oDesk, which links up 9.3m workers for hire with 3.7m companies.The on-demand economy is small,...
      PubDate: Tue, 30 December 2014 09:33:15
  • Greece’s election: The euro’s next crisis
    • Abstract: EVER since the euro crisis erupted in late 2009 Greece has been at or near its heart. It was the first country to receive a bail-out, in May 2010. It was the subject of repeated debate over a possible departure from the single currency (the so-called Grexit) in 2011 and again in 2012. It is the only euro country whose official debt has been restructured. On December 29th the Greek parliament failed to elect a president, forcing an early snap election to be called for January 25th. The euro crisis is entering a new, highly dangerous phase, and once again Greece finds itself at the centre.Investors promptly swooned, with the Athens stockmarket falling by almost 5% in a single day, bank shares down by even more and Greek 10-year bond yields rising to a new 2014 high of 9.5% (over seven points above those for Italy). The reason for this collective outbreak of nerves is that the polls point to an election win for Syriza, the far-left populist party led by Alexis Tsipras (pictured). Although Mr Tsipras says he wants to keep Greece in the euro, he also wants to dump most of the conditions attached to its bail-outs, ending austerity, reversing cuts in the minimum wage and in public spending,...
      PubDate: Mon, 29 December 2014 18:03:31
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