The_Economist_-_September_12_2015

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Contents

On the cover

Europe should welcome more refugees and economic migrants—for the sake of the world and itself: leader, page 13. Germany takes the lead, page 21. Countries have coped with great inflows of refugees before, though not always well, page 22. Diplomats’ hopes of ending Syria’s four-year war go into reverse, page 49

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Volume 416 Number 8955

Published since September 1843

to take part in "a severe contest between intelligence, which presses forward, and an unworthy, timid ignorance obstructing our progress."

Editorial o ces in London and also:

Atlanta, Beijing, Berlin, Brussels, Cairo, Chicago, Lima, Mexico City, Moscow, Mumbai, Nairobi, New Delhi, New York, Paris, San Francisco,

São Paulo, Seoul, Shanghai, Singapore, Tokyo, Washington DC

The Economist September 12th 2015 7

	10	The world this week		United States
			39	Cyber-security
		Leaders		Trouble shooting
			40	Culture wars, cont’d
	13	Refugees in Europe
				One man’s freedom
		Exodus
			41	United Airlines
	14	Gay marriage
				The chairman’s flight
		Some martyr
			41	Hawaii
	14	The Federal Reserve
				Under the volcano
		False start
			42	Museums of black history
	15	Business in China
				A fresh start
		The bit that works
			43	Wildfires
	16	Biodiversity
				America in flames
		Growing pains
			44	Lexington
		Letters		The cross blue line
	18	On Israel, Britain,		The Americas
		advertising, taxes, the
		Suez Canal, education,	45	Canada’s role in the world
		the octopus, capitalism		Strong—and free-riding
			46	Guatemala’s politics
		Briefing		Change you can laugh at
			48	Colombia and Venezuela
	21	The Syrian exodus
				Seeking scapegoats
		“Germany! Germany!”
			48	Mexico’s massacre probe
	22	Europe’s challenge
				Look harder
		Strangers in strange lands
		Britain		Special report
				Business in China
	27	The new Elizabethans
				After page 48
		Longest to reign over them
	30	Syrian refugees		Middle East and Africa
		A hasty change of heart
	30	The BBC World Service	49	Syria
		London calling		Positions harden
	32	The Scottish economy	50	Targeting terrorists
		Of whisky, oil and banks		Britain’s jihadi kill list
			50	Rights in the Gulf
		Europe		Creeping consultation
			51	Yemen’s war
	35	Turkey and the Kurds
				A downward spiral
		The hatred never went
			52	Public transport in Africa
	36	Greek voters
				In praise of matatus
		Life under capital controls
	37	Russia’s opposition		Asia
		Lonely but not lost
	38	Charlemagne	53	Coup politics in Thailand
		The migrant maze		Curiouser and curiouser
			54	Japan’s yakuza
				Doing the splits
			54	New Zealand’s flag
				Hang up the fern
			55	The Pacific Islands Forum
				Australasia feels the heat
			56	Banyan
				South-East Asia’s haze

The queen During Elizabeth II’s record-breaking reign, the United Kingdom has become a diverse, fragmented one, page 27

Canada It likes to think of itself as a global benefactor, but Canada has a mean streak, page 45

Yakuza Under pressure, Japan’s biggest criminal gang has split. Prepare for a fight, page 54

1 Contents continues overleaf

8 Contents

Digital assistants Technology firms vying to become consumers’ personal secretaries threaten privacy and competition alike, page 61

US consumer prices

% increase on a year earlier

				3
		FED TARGET		2
				1
				0
2011	12	13	14	15

The Fed Before raising interest rates, America’s central bank should wait until inflation is closer to target: leader, page 14. The case for a rate increase is hazy, page 69. The Fed faces some disturbing precedents, page 72

Alzheimer’s Along with other neurodegenerative disorders such as Parkinson’s, it may be transmissible, page 80

The Economist September 12th 2015

	China		Science brief
57	Local-government debt	78	What is consciousness?
	Looking for ways to spend		The hard problem
58	A religious revival
	Animal spirits		Science and technology
	International	80	Alzheimer’s disease
			Chain reaction
59	Agricultural biodiversity	81	Stonehenge
	Banks for bean counters		Where the demons dwell
60	Botany and bureaucracy	82	Palaeoanthropology
	A dying breed		Ecce Homo naledi
		82	Herpetology
	Business		Veggies in the making
61	Virtual PAs		Books and arts
	The software secretaries
62	Android in China	83	Frederick the Great
	Lure of the mobile kingdom		Prussian and powerful
64	Glencore and commodities	84	Drug-dealing in Brazil
	Nowhere to hide		Nem of Rocinha
64	Spanish family firms	84	The internet in Russia
	Opening up		Red web
65	E-commerce in India	85	Cricket
	Stack and deliver		Game of life
66	AirAsia	85	John Lahr on the theatre
	A turbulent patch		Bright light
67	Mitsubishi in Mexico	86	Pop Art at 50
	A covenant of salt		Colour me beautiful
68	Schumpeter

Scientific management in the digital age

Finance and economics

69The Federal Reserve

More red lights than green

70Buttonwood

A world of pricey returns

72A history of rate rises

Tightening pains

72Cash for residency

Visas for investors

73Bank heists

Crime and leniency

73Europe’s capital markets

Vision and reality

76Puerto Rico’s debt

No way out

77Free exchange

Measuring austerity

90Economic and financial indicators

Statistics on 42 economies, plus a closer look at budget transparency

Obituary

92Claus Moser

Outside in

China If the economic miracle is to continue, o cials must give the private sector more freedom: leader, page 15. Despite China’s recent troubles, the prospects for its enterprising private sector remain bright. See our special report after page 48

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10 The world this week

Politics

With strong support from Germany and France, and opposition from east European governments, the European Commission proposed a mandatory quota system that distributes refugees among the EU’s member states. An initial intake will number 160,000 though the figure is expected to rise. Refugees from Africa and the Middle East continued to enter the borderless Schengen area of the EU in ever greater numbers, appearing at times to overwhelm o cials and security forces in countries from Hungary to Denmark. Train services frequented by refugees have been shut down selectively, but those who reached Germany received a warm welcome.

The National Front, a far-right party in France, was charged with defrauding the state over expense claims for elections in 2012. Its leader, Marine Le Pen, has been riding high in the polls for months after attacking her opponents over corruption claims.

Clashes between Kurdish separatist forces and the Turkish army intensified following rebel attacks that killed 30 soldiers and policemen. Nationalist mobs damaged the o ces of a pro-Kurdish political party. Turkey sent troops and jets across the Iraqi border where rebels train and shelter.

Queen Elizabeth II’s reign reached its 23,226th day, surpassing the record set by Queen Victoria as Britain’s longest-serving monarch. Prince Charles already holds the record, at age 66, for oldest heir to the throne.

Still a pariah state

Ayatollah Ali Khamenei, Iran’s supreme leader, caused outrage in Israel, and perhaps some doubts among supporters of the deal with Iran on nuclear weapons, when he said in a speech that Israel will not exist in 25 years. He also stressed that the nuclear deal will not lead to talks with America on other issues.

Britain’s government revealed that it had killed two of its own citizens, and another man, who were fighting for Islamic State in Syria, with a drone strike. The two Britons were said to have been plotting imminent attacks on British targets, but the killing marks the first time that Britain has hit IS in Syria (it has been attacking the group in Iraq for months).

Egypt sent 800 ground forces to join the Saudi-led coalition in Yemen that is fighting the Iranian-backed Houthi rebels there, who in March drove out the internationally recognised government. Egypt had long resisted becoming involved.

Joice Mujuru, a leading member of Zimbabwe’s ruling Zanu PF party, was set to form a new party to contest power in a country that has been ruled continuously since its independence in 1980 by Robert Mugabe. Ms Mujuru was one of Mr Mugabe’s closest allies until her dismissal from the government last year following vitriolic attacks on her by Mr Mugabe’s wife, Grace, a contender to succeed him to the presidency.

The main opposition party in Rwanda brought a case before the Supreme Court to prevent changes to the constitution that might allow Paul Kagame, the president, a third term in o ce. The country’s parliament has voted to allow Mr Kagame to stand again, although he has not yet said whether he will do so.

Police in Kenya arrested three men who allegedly tried to carry a bomb into a shopping mall in Nairobi, the capital.

The Economist September 12th 2015

Security at most malls has been tight since an attack two years ago by the Shabab, a Somali jihadist group, on the Westgate shopping mall that resulted in at least 63 deaths.

It’s no joke

In Guatemala a political outsider and comic actor, Jimmy Morales, came top in the first round of a presidential election, capitalising on the mood of disgust with old-time politicians. Otto Pérez Molina has been ordered to stand trial on the charges of customs fraud, racketeering and bribery which forced him to resign as president recently.

A diplomatic crisis between two Latin American neighbours deepened after Venezuela’s President Nicolás Maduro closed another border crossing with Colombia, alleging that criminal gangs were infiltrating the area. The Venezuelans have deported more than 1,000 Colombians living near the border. Critics say Mr Maduro is looking for a scapegoat at a time when the economy is floundering.

An international inquiry poured huge doubt on the Mexican government’s account of the disappearance last year of 43 trainee teachers who are assumed to have been massacred. It rejected the government’s claim that all the students’ bodies were incinerated and said more investigation was needed.

Death rained down

O cials in Afghanistan claimed that at least 11 policemen were killed in an American air strike, potentially the highest toll from a friendly fire incident in the country since 2001. The police were

apparently operating undercover on an anti-drugs mission. American military o cials are investigating.

The Supreme Court of Pakistan enforced a ban on hunting the Houbara bustard, an endangered bird. Hunting parties from the Gulf states on the Arabian peninsula, where the bustard is thought to be an aphrodisiac, have often flouted laws in Pakistan, killing it in great numbers.

Just do your job

A county-court clerk in Kentucky spent a week behind bars for refusing a judge’s order to issue marriage licences to gay couples. The clerk maintains that her religious beliefs stop her from sanctioning gay marriage, which was legalised by the federal Supreme Court in June. Many wondered why she just didn’t simply resign if she was so o ended.

Hillary Clinton apologised for using a private e-mail server when she was secretary of state, admitting it was a “mistake”. The front-runner for the Democratic presidential nomination also outlined plans to make political donations more transparent should she be elected. On the Republican side, Jeb Bush proposed simplifying the tax code by reducing the number of tax brackets, cutting the top rate to 28% from 39.6% and lowering corporate tax from 35% to 20%.

The pilot of a British Airways jet that caught fire as it was about to take o from Las Vegas for London was praised for his actions. Smoke billowed through the aircraft when an engine malfunctioned, but a swift evacuation

saved all 172 people on board. 1