The Economists

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• Economic planning in India: Tales of the unexpected February 16, 2012
  IN 1985, the year Mikhail Gorbachev took over as head of the Communist Party of the Soviet Union, India published its seventh economic plan. Its preface said planning was a “precious gift” from Jawaharlal Nehru, India’s first prime minister, who had been an admirer of Soviet economics. Inevitably, the goals of the document, which included ending poverty by 2000, were missed by a country mile as India slipped towards a crisis that prompted it to open up its economy in 1991.Yet some things about the report have the capacity to surprise today. The preface’s author, Manmohan Singh, went on to lead the 1991 reforms and is now prime minister. The body behind it, the Planning Commission, is still alive and will soon launch its 12th plan for the five years beginning in April. It is the most powerful organ in India that would not be invented if it did not already exist. It is run by a bureaucratic rock star and, weirdly, is a bastion of liberal views in a government that has fallen out of love with reform.By rights, India’s Planning Commission should be toast. Since 1991 the private sector has boomed, taking more...
• India and its near-abroad: Your friendly big brother February 16, 2012
  INDIA’S foreign minister, S.M. Krishna, gushes about the close “civilisational, cultural” ties his country shares with Sri Lanka. He notes how India is the biggest trading partner and source of tourists for the island nation, plus one of the largest investors. It dishes out pots of aid, including roughly $300m for 50,000 Tamils, displaced in a brutal civil war that ended in 2009, to build houses near Kilinochchi and Jaffna in Sri Lanka’s north. And India is building a power station, and renovating railways and a port.Memories in Sri Lanka of India’s troubled role in the long and bitter civil war appear to be fading. Meanwhile, India, officially, does not worry about signs of its neighbour’s dalliance with China. That is despite the news last month that Chinese investors took 85% control of the project extending Colombo’s main commercial port, which handles goods traded almost entirely with India. “Sri Lanka is sensitive to the security concerns of India,” says the foreign minister, reassured.But regardless, Mr Krishna says, India does not (any longer) meddle in the affairs of its neighbours. “We will not...
• South Korea’s influence in Asia: This year’s model February 16, 2012
  GIVING on to one of the Cambodian capital’s grand, crumbling boulevards is an unusually modern, unfeasibly clean building: the home of the South Korean embassy’s commercial section. It is also noticeably big, indicative of South Korea’s growing economic ties with one of the poorest countries in the region. Officials point out that two of South Korea’s biggest banks opened here in 2009, and South Korean engineers are building Phnom Penh’s highest building. South Korean investments, though impressive, lag behind the Chinese and Japanese ones, but relative to South Korea’s size, the embassy’s staff like to think that they are not doing badly.Besides the usual commercial ties, however, South Korea has been cultivating another, equally significant, link with Cambodia. Impressed by the economic success of South Korea over the past decades, Cambodian officials and businessmen are now flocking to Seoul, South Korea’s capital, to find out how the country has done it. And the South Koreans, proud of their achievements and eager to tell the world, are doing everything they can to oblige. It is an effective exercise of “soft...
• Indonesia: The Komodo economy February 16, 2012
  Thick-skinned, buoyant and quick? Correction to this articleIN THEIR presentations to foreign investors, Indonesian officials often like to begin with a montage of images from their fascinating country: the elegant mast of Jakarta’s Wisma 46 skyscraper, for example, and the vast ninth-century Borobudur monument. One presentation last year even featured a Komodo dragon peering out of the frame. As a symbol of Indonesia’s economic virtues, these enormous and venomous lizards, native to a couple of islands, are not obviously appealing. But they are apt. The Komodo is thick-skinned, with scales resembling chain-mail, and surprisingly quick. That is a fair description of Indonesia’s resilient, resurgent economy. It grew by 6.5% in 2011, according to figures released this month, its...
• Nancy and Lawrence Durrell: Days of heaven February 16, 2012
  A promising start Amateurs in Eden: The Story of a Bohemian Marriage, Nancy and Lawrence Durrell. By Joanna Hodgkin. Virago; 335 pages; £25. Buy from Amazon.co.ukGIVEN Greece’s economic woes and role as yet another Mediterranean holiday destination, it is hard to appreciate the freedom, sunlight and sense of space that it provided 50 or more years ago. Intrepid travellers would come to explore ruins and ancient villages in solitary peace, and sleep under the stars on empty sandy beaches. The islands were especially enticing, and no books contributed more to their image as a paradise than those by the Durrell brothers, Lawrence and Gerald. “Prospero’s Cell” (1945), Lawrence’s diary of life on Corfu, and “My Family and Other Animals” (1956), Gerald’s account of his experiences as a child there, are brilliant, contrasting views of life on this Greek island in the 1930s, and remain popular to this day.“Amateurs in Eden” is written by Joanna Hodgkin,...
• Haiti’s history: Many trials and errors February 16, 2012
  Look back in anger Haiti: The Aftershocks of History. By Laurent Dubois. Metropolitan Books; 434 pages; $32 and £18.99. Buy from Amazon.com, Amazon.co.ukAFTER the huge earthquake that shook Haiti in 2010, hundreds of foreign journalists swarmed into the country. They sought both to take stock of the damage and to explain why Haiti was in such poor shape to begin with. Laurent Dubois, a professor at Duke University, was disappointed with their accounts of Haiti’s past, which attributed the country’s poverty either to cultural flaws or foreign meddling. “Pundits offered a plethora of ill-informed speculation,” he writes. “Nearly all of the coverage portrayed Haitians themselves as either simple villains or simple victims.”Mr Dubois’s new book aims to counter-act those misconceptions. It recounts the country’s political, economic...
• Capital punishment in America: Justice, delayed and denied February 16, 2012
  Anatomy of Injustice: A Murder Case Gone Wrong. By Raymond Bonner. Knopf; 298 pages; $26.95. To be published in Britain in March; £17.99. Buy from Amazon.com, Amazon.co.ukWHAT sort of town was Greenwood, South Carolina in the early 1980s? It was the kind of place where a prominent white man could get away with shooting and killing a black man who walked across his property at night. When the local chief prosecutor, William T. Jones, brought the case before a grand jury, he was not looking for an indictment. Surely anyone would have behaved the same way under the circumstances, he argued. Surely, he told the jurors, they too would have picked up a shotgun. The grand jury did not indict.A few months later Jones persuaded the same grand jury to indict Edward Lee Elmore, a 23-year-old black man, for the murder of Dorothy Edwards, a 75-year-old white woman. She was found inside her bedroom closet, bruised and repeatedly stabbed. Mr Elmore was sentenced to death less than 90 days later. This grim case is the subject of “Anatomy of Injustice”, a gripping and enraging book from Raymond Bonner, a veteran investigative journalist at...
• Poverty in Mumbai: The places in between February 16, 2012
  Behind the Beautiful Forevers: Life, Death, and Hope in a Mumbai Undercity. By Katherine Boo. Random House; 256 pages; $27. To be published in Britain in July by Portobello; £14.99. Buy from Amazon.com, Amazon.co.ukJOURNALISTS delight in metaphors that sum up an entire story with one striking image. In Mumbai, itself a neat nutshell of India’s extremes, this image is served on a platter: the shiny towers that rise from a sprawl of squalid slums, the two inevitably “jostling for space” in globalising India. This picture is deployed for all sorts of stories, whether social, political or economic, and in any number of publications including this one.Katherine Boo, a staff writer at the New Yorker and winner of the Pulitzer prize, has written about poverty for two decades. She is not immune to the power of this image of extremes. But instead...
• Patterns of migration: Go with the flow February 16, 2012
  The Mara Crossing. By Ruth Padel. Chatto & Windus; 254 pages; £12.99. Buy from Amazon.co.ukTHE most seductive illusion of the planet we inhabit is that it is standing still. Wind blows, but the trees only bend. At the river bank only the water recedes. But the reality is that the galaxy is churning, the solar system turning, the earth spinning around the sun. Most creatures are in constant movement, too. The dragonflies crossing oceans have a biochemistry that is constantly in flux, and within its DNA there are innumerable further odysseys. The only stillness is in the mind, yet here too Ruth Padel sees dynamism. “The Mara Crossing”, her collection of essays and poems, tackles the question of migration, which she broadly defines as “Go and Come Back” (eg, birds, etc) and “Go and Stay” (eg, invasive species, humans, etc). Her closing poem, “Time to Fly”, considers the impetus of leaving. One goes, she says, because the world is changing and you have lost the key. Say goodbye to the might-have-beens – You go because you’re alive, because you’re dying, maybe dead already. You go because you must. The crossing of the title refers to the great migration of hoofed animals across the Mara river in Kenya and Tanzania....
• Murakami in the Middle East: Hundred-metre dash February 16, 2012
  You should see me with a black light TAKASHI MURAKAMI’S new show opens with a six-metre inflatable portrait of the artist as a cross-legged Buddha with dirty feet, hairy legs and a scarred shin, his hand stretched out in welcome. The effect is overpowering, dwarfing visitors as they enter. By the show’s tenth and final room, they are stepping on his face, the floor a wall-to-wall image of his likeness. This exhibition, which opened on February 9th in the grounds of the Museum of Islamic Art in Doha, is called “Murakami-Ego”. But it is as much about the Buddhist suppression of ego and the road to enlightenment as it is about the artist’s overheated obsession.Like the show—one of his biggest and his first in the Middle East—Mr Murakami’s work marries seemingly incompatible opposites. Though he is one of the world’s most recognisable artists, his pieces are designed to conceal the hand of the artist. Long a critic of Japan’s conservatism and fatalism, he has also been moulded by Japan’s post-war consumerism, imagery and fixations. Mr Murakami has become a global brand, but he...
• The Dodd-Frank act: Too big not to fail February 16, 2012
  Correction to this articleSECTIONS 404 and 406 of the Dodd-Frank law of July 2010 add up to just a couple of pages. On October 31st last year two of the agencies overseeing America’s financial system turned those few pages into a form to be filled out by hedge funds and some other firms; that form ran to 192 pages. The cost of filling it out, according to an informal survey of hedge-fund managers, will be $100,000-150,000 for each firm the first time it does it. After having done it once, those costs might drop to $40,000 in every later year.Hedge funds command little pity these days. But their bureaucratic task is but one example of the demands for fees and paperwork with which Dodd-Frank will blanket a vast segment of America’s economy. After the crisis of 2008, finance plainly needed better regulation. Lots of institutions had turned out to enjoy the backing of the taxpayer because they were too big to fail. Huge derivatives exposures had gone unnoticed. Supervisory responsibilities were too fragmented. Dodd-Frank, named after its co-sponsors, Senator Chris Dodd and...
• Bagehot: The Clegg paradox February 16, 2012
  IT WOULD probably be a mistake for Nick Clegg, the deputy prime minister, to walk into many British pubs—imagine a bar suddenly stilled, pints hovering in mid-air and a silence broken only by growls from the landlord’s dog. Among those who voted for his Liberal Democrats in 2010, nearly two-thirds say Mr Clegg is doing a bad job. Most polls put party support at around 10%.A warmer welcome awaits at the Royal Hotel in Dungworth, a stone-built inn on the edge of the Peak District, in the rural north of Mr Clegg’s constituency of Sheffield Hallam. Dungworth lies in Clegg country: locals handed the Lib Dem leader a thumping majority in 2010. But even here, Mr Clegg’s place in David Cameron’s Conservative-led coalition worries voters. They want to see Lib Dems staking out clearer differences with their Tory partners. Yet calls to be more distinctive trigger a fresh problem. Many of Mr Clegg’s most distinctive beliefs—from his liberal views on immigration and crime to his pragmatic approach to the European Union—put him in opposition to most voters.The puzzle is summarised by Dave Lambert, landlord of the Royal. He...
• Economic turmoil: Over to you, George February 16, 2012
  IT HAS been a turbulent week for Britain’s economy. On Monday, a bad start: Moody’s, a credit-rating agency, threatened to strip the government of its cherished AAA status. New data on Tuesday repaired some of the damage, showing that consumer-price inflation was finally falling, to 3.6% in January from 4.2% in December, and over 5% before that. Then Wednesday’s news was glum again: unemployment rose to 8.4% in the three months to December, the highest rate for over 15 years. To cap it all, the Bank of England published its quarterly Inflation Report, setting out where it thinks the economy is heading, what the bank will do about it and what it won’t.Of the barrage of numbers released this week, unemployment will be the one that concerns most people. It will worry the chancellor of the exchequer, George Osborne, especially, as joblessness wrecks both household and government finances. The best antidote is growth, but prospects are poor. Sir Mervyn King (pictured above), governor of the central bank, says the economy is likely to zigzag in and out of positive territory until the end of the year.Threats to...
• Organ transplants: Life after death February 16, 2012
  FOR all the National Health Service’s hard work to boost organ donation, around 1,000 people die each year for lack of a transplant. The active waiting list numbers more than 7,600, and 10,000 may be a fairer reflection of need. As hypertension, obesity and the miracles of modern medicine proliferate, that gap is likely to increase—unless donation rates rise dramatically. Deceased donors are twice as numerous in Spain as in Britain, per million people (see chart). Even the EU average is higher. (Britain does better when living donors are included, but dead ones are more useful because they can part with a wider range of organs.) Why the difference?For many the answer lies in Britain’s “opt-in” regime of informed consent. A potential donor has to signal his intent by enrolling on an official Organ Donor Register. Though 90% of Britons say they approve of donation, only 30% have signed up. Spain, and most EU members, have instead embraced some form of presumed consent, in which everyone is assumed to be a donor unless he expressly “opts out”. This week the British Medical Association (BMA), which represents...
• Oil and gas: Roll on the barrels February 16, 2012
  FORTY years ago Aberdeen’s harbour was so packed with fishing boats that you could walk from one quay to another across them. The fishing industry has since declined, as it has elsewhere in Britain. The shipyard has shut too. But the harbour is as busy as ever with giant supply tugs, survey vessels and tankers that now serve a more lucrative industry: North Sea oil and gas.Since they were discovered off the British coast in 1969, more than 40 billion barrels have been extracted. When the country’s first oil pipeline from the Forties field opened in 1975, it was the queen who pushed the gold-plated button in BP’s Aberdeen headquarters; Harold Wilson, the prime minister, was there too. This newspaper hailed “the coming glut of energy”; “It couldn’t have happened to a nicer lot of people,” another article began.Back then, the industry thought it would be winding down by the 2010s—the giant Forties field was due to be decommissioned this year. But, as in other oilfields, improved technology, new owners and high commodity prices have made continued development possible. Forties is now producing 16,000 barrels a day...
• Funding the arts: The show must go on February 16, 2012
  A PLAY about trench warfare starring a puppet horse hardly screams “blockbuster”. But “War Horse”, which opened at the National Theatre in 2007, sold out on both sides of the Atlantic. Nick Starr, the National’s executive director, says the vital ingredient in its success was perhaps the government subsidy, there “when no one could imagine what might come of it”.The arts in Britain have enjoyed a long funding heyday, which is now drawing to a close. The National Lottery has given £3.8 billion ($6 billion, at current exchange rates) to theatres, opera companies, dance troupes, film-makers, artists and others since it began in 1994. When Labour came to power in 1997 Chris Smith, the culture secretary, focused on widening access. After years on the defensive, arts groups were suddenly nurtured as part of an agenda to improve education, regenerate cities, and empower minorities and poor people. Local councils, inspired by the transformation of Glasgow in the 1990s, saw investing in culture as a way to revive down-at-heel city centres. Because lottery money has to be used for special schemes, not running costs, it...
• Lessons from East Asia: Classroom crush February 16, 2012
  Can you hear me at the back? WHEN parents look for a school for their child, those that offer small classes appeal. Close supervision might stop Tilly from being distracted from her work by little Johnny’s clownish antics, the thinking goes, or allow the teacher to identify shy Sue’s true ability. Yet few academic studies have found that class size makes any difference to how well children perform in exams. Indeed, international comparisons suggest that Britain could benefit from having much larger classes.Ever since 2000 when the OECD, a think-tank, first rated how well 15-year-olds in different countries were able to use what they had learned at school, Britain has been sliding down the rankings. The problem is not that its teenagers are doing much worse than in the past, rather that their rivals are doing better. While Britain’s performance stagnates, East Asian schoolchildren surge ahead. In 2000 the gap between British and South Korean teenagers was negligible; by 2009, it was yawning.Pouring more money into the British system has failed to perk up its youngsters: spending per...
• NHS reform: Difficult birth, slow recovery February 16, 2012
  THE coalition’s health and social-care bill is a textbook example of how not to introduce major reform. A sprawling piece of legislation, it was launched at a bemused public without much preparation. Clumsy explanations by Andrew Lansley, the health secretary, did not help, especially when the Conservative and Liberal Democrat coalition partners have differing instincts on health in the first place.These rifts have deepened since January 2011, when measures to change the way family doctors run their practices and referrals were announced along with plans to increase competition in a largely state-run system. Since then, the bill has been paused, amended, opposed by professional bodies and fiercely scrapped over. An online petition calling for a rethink has garnered more than 125,000 signatures. A mere 18% of respondents recently told YouGov pollsters that they think the proposed changes are right.Still, barring last-minute upheavals the legislation will pass through the House of Lords in a few weeks. Some think that in practice it will prove less divisive than it looks in prospect. Nick Bosanquet, a...
• Schumpeter: This time it’s serious February 16, 2012
  IS AMERICA fading? It seems an odd thing to say about a country that so dominates the industries of the future. Where else could Facebook have grown from a student prank to a $100 billion company in less than a decade? America has been gripped by worries about decline before, notably in the 1970s, only to roar back. But this time it may be serious.There is little doubt that other countries are catching up. Between 1999 and 2009 America’s share of world exports fell in almost every industry: by 36 percentage points in aerospace, nine in information technology, eight in communications equipment and three in cars. Some loss of market share is inevitable as China and other economies emerge. But even in absolute terms, there is cause for worry. Private-sector job growth has slowed dramatically, and come to a halt in industries that are exposed to global competition. Median annual income grew by an anaemic 2% between 1990 and 2010.The March issue of the Harvard Business Review is devoted to “American competitiveness” (by which it means the country’s ability to improve productivity and living...
• The best and worst stocks of the past decade: Invest in a time machine February 16, 2012
  Hindsight can be frustrating. We kick ourselves for not buying Apple shares ten years ago, when they were $12.50 each. On February 13th they rose above $500. So $100 invested in Apple in February 2002, around the time it unveiled its redesigned iMac, would be worth almost $4,000 today. The same investment in Sberbank, Russia’s biggest state-owned bank, would now be worth more than $3,700. But cheer up. We can at least be grateful that we didn’t buy shares in Allied Irish Banks or AIG. Bets of $100 in those firms ten years ago would now be worth $1.33 and $2.21 respectively. Western financial institutions have been by far the worst investment of the past decade. As for the next one, who knows? (Because this chart looks at the 200 biggest existing companies that also existed in 2002, it ignores both new and recently bankrupt firms.)