The world this week

Politics this week Barack Obama used a prime-time news conference marking six months in office to make the case for his blueprint for health-care reform. Polls show Americans increasingly disapprove of the president&rsqu Business this week After a 15-hour board meeting Porsche removed its chief executive, Wendelin Wiedeking, and accepted that the state of Qatar should take a stake in the company. The actions smooth the way for a merger w KAL's cartoon

Leaders

The Arab world: Waking from its sleep A quiet revolution has begun in the Arab world; it will be complete only when the last failed dictatorship is voted out WHAT ails the Arabs? The United Nations Development Programme (UNDP) this week published the fifth in a series of hard-hitting reports on the state of the Arab world. It makes depressing reading. The A Reversing Honduras's coup: Why and how to reinstate Zelaya Restoring legitimacy in Central America will take pressure as well as persuasion ALMOST a month after the army ousted Manuel Zelaya, the elected president of Honduras, the danger has grown that a conflict of powers in an otherwise insignificant Central American country may turn int Rebalancing global growth: A long way to go The global recession is coming to an end, but the ingredients of a lasting recovery are still missing WITH luck, the global slump has reached its trough. Asia’s economies are looking rosier, buoyed by a spectacular rebound in China, where output grew at an annualised rate of some 16% between Apri Pakistan and the Taliban: Better news from the frontier A modest success against the Taliban in Malakand; now the battle must be taken to more powerful militants LONG reviled for their reluctance to fight the Islamist militancy that they themselves helped unleash, Pakistan’s generals have a rare victory to boast of. In a three-month offensive against the Central banks and regulation: Rulers of last resort For good and bad reasons, central banks are being set up to fail MOST political constitutions try to disperse power. In financial regulation the fashion is to concentrate it. America’s Federal Reserve is accumulating huge control over the economy and banks. Si

SIR Letters

On retirement, democracy, Sonia Sotomayor, America's economy, scientists, evolution SIR – Regarding your special report on ageing populations (June 27th), I once proposed a solution somewhat tongue in cheek to the problem of pensions: turn retirement upside down. In my plan, peo

Briefing

Natalia Estemirova on Chechnya: War and peace through the bravest eyes The testimony of a murdered human-rights campaigner IT WAS the kind of scene she had described many times. On July 15th at 8.30am, as she left her flat in Grozny, Natalia Estemirova was forced into a white Lada. She shouted that she was being kidnapped,

United States

The deficit and health care: Falls the shadow The enormous deficit is complicating the president’s ambitious plans IT WAS a rare victory for fiscal rectitude. On July 21st the Senate stripped the funding for seven more F-22 fighter jets from a big spending bill, bowing to Barack Obama’s threat to veto the air Saving the Republicans: The Young Guns go for it Two possible candidates to lead the party out of the wilderness POLITICIANS capable of renewing the unpopular and demoralised Republican Party are hard to find in the Senate, where they cannot even mount a filibuster these days. Neither do state governors promise m California's tax system: Smoothly does it As California wrestles with its budget, one group thinks deeply about its taxes AGAINST the clock, as usual, California’s leaders on July 20th hammered out a budget agreement. This just about plugs the fiscal gap which has forced the state, in recent weeks, to issue IOUs in Tourism in Michigan: The triumph of optimism Michigan hopes tourism will help the state rebound DOWNTOWN Traverse City is filled with shops, restaurants and an unusually large number of ice-cream parlours. Boats glide on twinkling bays. A peninsula is blanketed with cherry trees and vineyards. Th Labelling menus: The truth shall make you thin Restaurants across the country may have to post calorie-counts How many?ON JULY 1st California began enforcing a new menu-labelling law, which requires chain restaurants (ones with more than 20 branches) to post the calories in their fare on their menus. Three oth New Jersey's race for governor: The target Jon Corzine, the Democratic incumbent, looks vulnerable Corzine (right) and friendMORE than 17,000 people turned up in the hot sun on July 16th to see Barack Obama speak at a campaign rally. It was his first visit to New Jersey since be became president. A Music festivals: Brass in pocket Music is big business in small towns A nice little earnerFOR most of the year, Manchester looks like any small Southern town. It nestles between Nashville and Chattanooga with a county courthouse flanked by war monuments, and a Wal-Mart o Lexington: The Obama cult If Barack Obama disappoints his supporters, they will have only themselves to blame IN JANUARY 2007 Mike Huckabee, a former governor of Arkansas, said he was running for president to revive “our national soul”. He was not alone in taking an expansive view of presidential r

The Americas

Mexico's drug gangs: Taking on the unholy family The government has deployed thousands of troops against a sinister new mafia. But severing its many tentacles requires a much more agile state IN SEPTEMBER 2006 La Familia (“The Family”) introduced itself as the latest force in organised crime in Mexico by tossing five severed heads onto a nightclub dance floor in Uruapan, a town Brazil's Petrobras: Oil and revolution Petrobras has vast oil reserves, commercial clout and excellent Chinese connections. But it faces political uncertainty Gabrielli presses aheadAS BOSSES of oil majors go, José Sergio Gabrielli stands out as unusual. The chief executive of Petrobras, Brazil’s part-public, part-private oil and gas giant, Mr G Ecuador, Colombia and the FARC: From the guerrilla's mouth Mistrust deepens between neighbours SPEAKING earlier this month Ecuador’s foreign minister, Fander Falconí, observed that his country’s relations with Colombia had never been as bad. They just got worse: a video leaked Canada's prairie drought: Back to a dusty future Farmers fret as the rivers dwindle DURING the Depression of the 1930s, drought turned much of Alberta and Saskatchewan, on Canada’s western prairies, into a dust bowl. The combination of poor harvests and low grain prices drove th

Asia

Pakistan takes on the Taliban: On the charge in Malakand Pakistan’s army claims a rare success in its campaign against the Taliban SULTANWAS, a once-prosperous village in Pakistan’s North-West Frontier Province (NWFP), is now a bomb site. Its white concrete houses, gaudily decorated thanks to migrant wages sent back from Dub China's eclipse: The solar eclipse in China On July 22nd the moon’s shadow fell across China’s industrial heartland in the longest total solar eclipse the 21st century will witness. Never before have so many people lived under an ecl China, the law and NGOs: Open Constitution closed The state cracks down on civil society ONE of the more hopeful flickering signs of democracy in China in the past few years has been the growth of public-interest lawyers willing to challenge in court examples of abuse and corruption by the India and America: Dripping healing oil Hillary Clinton shows India that America cares WHEN she landed in Mumbai on July 17th as the first front-rank visitor from Barack Obama’s administration, Hillary Clinton, America’s secretary of state, faced an unfamiliar difficulty. Ind China and America: Doubled up G2: twice as big, no more productive ADDING a conjunction to the name of a diplomatic forum may not sound like much, but America and China insist it is significant. On July 27th the two countries will hold their first Strategic and Econom Terrorism in South-East Asia: After the bombings The fight against Jemaah Islamiah is going better than it might seem As many thorns as petalsCROSS-BORDER co-operation tops the agenda whenever ministers in South-East Asia meet, as they did this week on the Thai island of Phuket. Until now, legitimate businesses have s Taiwan, China and Ma Ying-jeou: The thoughts of Chairman Ma Why the president’s decision to become party chairman matters to China TAIWAN’S President, Ma Ying-jeou, is the sole candidate and he is only campaigning for the position in his spare time, but his shoo-in election on July 26th as chairman of his own Nationalist Par Banyan: The Lady should be for turning Aung San Suu Kyi is remarkable. But Myanmar’s problems are more than just those of democracy denied JULY 20th marked the 20th anniversary of the day when military rulers first placed Aung San Suu Kyi under house arrest. The leader of Myanmar’s democracy movement has since spent more than 13 yea

Middle East & Africa

South Africa's economy: A battle for control has begun President Jacob Zuma will have to use his fabled skills as a conciliator to balance the factions in his new government FACTORIES across the country had to close this week as many thousands of workers in chemical and other industries downed tools to press for double-digit pay rises. Hundreds of thousands in the public s Mauritania and the African Union: All is rather easily forgiven A coup-maker becomes a civilian president ALMOST a year after General Muhammad Ould Abdelaziz took power at the head of a military junta, he has stripped off his uniform and got himself elected as Mauritania’s civilian president. Various Detainees in Saudi Arabia: An awful lot A human-rights report takes the kingdom to task SINCE the attacks on New York’s twin towers in 2001, “the Saudi authorities have imposed a range of counter-terrorism measures that have worsened what was already a dire human-rights situat Egypt after Hosni Mubarak: Put a proper procedure in place The president’s ill-health and refusal to retire is bad for everyone’s nerves I’m not going yetTHE question of Hosni Mubarak’s succession is once again cropping up with increasing regularity as whispers of the president’s ill-health spread. It was widely rumour Iran's holiest city: Qom all ye faithful Muted dissent in Iran’s holiest city AT FIRST glance the holy city of Qom, Iran’s pre-eminent place of Shia scholarship, still feels pretty conservative. Almost all its women are covered from head to toe. Mullahs saunter by in flowi Israel and Palestine: Co-operation in the ether Hope for economic co-operation across the barrier ALTHOUGH Israeli and Palestinian politicians have yet to resume negotiations over land and peace, some software engineers and programmers from both communities are working together in the clouds high a

Europe

Turkish foreign policy: Dreams from their fathers Turkey’s canny foreign minister seeks to pursue delicate diplomacy all around WHEN the official result of Iran’s contested presidential election was announced last month, Turkey was one of the first countries to congratulate Mahmoud Ahmadinejad. Set against the repression Iceland and the European Union: All things to Althingi Three big obstacles stand in the way of Iceland’s EU membership The fish may not enjoy the European UnionON JULY 16th Iceland’s Althingi, or parliament, voted by 33 to 28 to apply to join the European Union. This is the biggest step taken by the Social Democr Struggling French Socialists: Left behind It’s grim on the gauche FRENCH Socialists are going on holiday in a state of disarray. They are to meet at the end of August for their summer school, an event meant to offer calm reflection amid shirtsleeves and platters of f Spain and Gibraltar: Rocky horror show An historic visit, but the same arguments over sovereignty IT IS famous for Barbary apes, cheap shops and stunning views of Europe and Africa. Until this week, however, these attractions had failed to lure any Spanish government minister to the British territo Germany and Europe: Constitutional concerns The political rows over a new euro-law demanded by the Constitutional Court THE reverberations from last month’s ruling by Germany’s Constitutional Court on the European Union’s Lisbon treaty seem to be growing. In effect, the court said that the EU is not de Poles, Czechs and the Lisbon treaty: The awkward squad Why the Polish and Czech presidents drag their feet over the Lisbon treaty Klaus and Kaczynski, procrastinating presidentsAFTER being subject to commissars in Moscow, some east Europeans are twitchy about commissioners in Brussels. But that only partly explains the reluctance Charlemagne: Battle of the big beasts Mutual suspicions and national interests underlie European rows over financial regulation IN THE European Union it is often tempting to reduce policy debates to clashes between old rivals like France, Britain and Germany. It is not only journalists who are guilty. A few years ago, it is sai

Britain

Local newspapers in peril: The town without news As local newspapers collapse, information is finding new ways to reach people. Not all are high-tech WHAT happens when a place loses its newspaper? Most of the 80 or so local papers that have closed in Britain since the beginning of last year were the second- or third-strongest publications in their m Papers that prosper: True grit Why some papers manage to stay alive and kicking Hold the front pageFOR all the woes of local newspapers across Britain, there are those that thrive. Among them are the New Milton Advertiser and the Lymington Times. Located in a sleepy stretch of the Financial reform: More to do Banking reform should aim at those regulated, not just the regulator “MR OSBORNE…has embarked on a half-baked plan of destruction,” thundered a London banker in a letter to the Financial Times. Not all City folk have been so scathing. But plans to abo Cricket in transition: The 75-year itch The thrill of an English win over Australia masks big problems for Test cricket CRICKET can teach you many things—not least patience. England’s teams have needed plenty. This week, for the first time since 1934, they beat Australia, the old enemy, in a Test (five-day) Posh journalists: Red tops and blue blood How a working-class trade became well-to-do Derek Jameson: East End boy makes goodIT WAS 1944 when Derek Jameson, an unqualified 14-year-old from an east London slum, boarded the number six bus to Fleet Street and got a job as a messenger-boy at The impact of quantitative easing: When to call a halt The central bank looks likely to decide in August that it has done enough IN EARLY March, when the Bank of England lowered the base rate to 0.5%, it reached the limit of its usual way of reviving an ailing economy. It promptly moved into the unknown, switching to quantitativ The rise of paganism: Of Green Men and policemen… Resurrecting the old religion …and their sacred stonesMUCH blether about devil-worship, “political correctness gone mad” and the destructive effects of unchecked individualism greeted the announcement on July 16t Bagehot: No representation without taxation Why Lord Ashcroft remains a problem for David Cameron “I DON’T care if they were within the rules.” So said David Cameron in May of his colleagues’ dodgy expense claims. Things could be within the rules and still be unacceptable; p

International

Responsibility to protect: An idea whose time has come—and gone? An idealistic effort to establish a new humanitarian principle is coming under attack at the United Nations GARETH EVANS, a former Australian foreign minister and roving global troubleshooter, makes a bold but passionate claim on behalf of a three-word expression which (in quite large part thanks to his effo Establishing peace: Blue briefcases After the peacekeepers come the peacebuilders. But they are struggling IT DOES not take very much to stoke the embers of a conflict, especially if peace has come about not on its own, through exhaustion, but thanks to foreign soldiers, acting under the African Union or th Radio propaganda: Crackles of hatred Silencing murderous messages is not as easy as it sounds LAST year, as Kenya slid into mayhem, the words that sputtered forth from crude transmitters were cryptic but, to those in the know, horrifying. “People of the milk”, a reference to the cat

A special report on the Arab world

Waking from its sleep A quiet revolution has begun in the Arab world; it will be complete only when the last failed dictatorship is voted out WHAT ails the Arabs? The United Nations Development Programme (UNDP) this week published the fifth in a series of hard-hitting reports on the state of the Arab world. It makes depressing reading. The A The world of the Arabs What do they have in common? CONVENIENT as it is to describe the 22 countries (including the unborn Palestine) that belong to the Arab League as “the Arab world”, the neat phrase can mislead. This is a heterogeneous ag Imposing freedom Well, that didn’t work Obama and Mubarak talked of respect, not freedomIN THE month of June an attractive black American politician visited a university in Cairo and made an astonishing speech. “For 60 years,” sa All change, no change Mountain above, volcano below IMAGINE an Arab Rip Abu Winkle who had fallen into a deep slumber some time in the early 1980s. If he woke up now, he would rub his eyes in disbelief at how little had changed. Hosni Mubarak is still t How to stay in charge Not just coercion, sham democracy too The gentler side of Kuwaiti politicsA LOT of the wounding comparative statistics trotted out to demonstrate the backwardness of the Arabs appeared first in the Arab Human Development Report of 2002. It The fever under the surface A silent social revolution Inculcating the habit of protestPRESIDENT ASSAD’S decision to nip the reform movement in the bud in 2005 should not have surprised Syria’s would-be democrats, for this was a moment of extre Which way will they go? A great struggle for ideas is under way in the Middle East The Hizbullah factor“THE Arab world is more or less a vicious circle. None of its problems will be solved soon. All these troubles have the capacity to reinvent themselves.” So says Ali al- Sources Books:“The Middle East: A Beginner’s Guide”, by Philip Robins. Oneworld“A Path Out of the Desert”, by Kenneth Pollack. Random House“Voices of the New Arab  Offer to readers Buy a PDF of this complete special report, including all graphics, for saving or one-click printing.The Economist can supply standard or customised reprints of special reports. For more information and

®©™ Business

Monetising social networks: Tweeting all the way to the bank Can virtual communities make billions of dollars from their millions of connections? WHENEVER the founders of Twitter, a social-networking service, have been asked about how much revenue they expect to generate from their creation, they have politely deflected the question. So when a h Virtual worlds for children: Online playgrounds There is life in virtual reality after all REMEMBER Second Life, the virtual world that was supposed to become almost as important as the first one? Now populated by no more than 84,000 avatars at a time, it has turned out to be a prime example GM auctions Opel: A disputed bid General Motors and the German authorities differ over Opel’s future THE endgame to decide the ownership of Opel/Vauxhall, General Motors’ European unit, has begun. On July 20th three potential suitors submitted their final bids. Two days later GM told the Opel/Va America's faltering livestock industry: Animal welfare As exports tumble, America’s pig and cattle farmers are stumbling UnwantedTHE Pipestone System, which manages sow farms in the Midwest, has an upbeat motto: “Helping farmers today create the farms of tomorrow.” Of course, the farms of tomorrow may be deci Upheaval at Porsche: Exit Wiedeking The predictable end of a long battle Wiedeking and Härter, in happier timesIN THE morning of July 23rd, Porsche announced the departure of its chief executive, Wendelin Wiedeking, and its chief financial officer, Holger Härter. The spread of pop-up retailing: Gone tomorrow A surprising shopping experience is becoming mainstream “NOW you see it, now you don’t” could be the slogan for American retailing these days. Even some of the most mainstream brands, like Circuit City and Linens ’n Things, have shut Europe's unwieldy patent regime: Smother of invention European companies are suffering from an ineffective patent system IN 1997 the European Patent Office (EPO) gave a patent to Massachusetts General Hospital for its use of nitric oxide to treat bronchoconstriction, a method often used for “blue baby” syndro Face value: Flush with ambition Can Kunio Harimoto convert the rest of the world to the charms of the Japanese lavatory? IT IS the Lamborghini of lavatories, the Cadillac of commodes. With its sleekly sculpted basin, high-tech control panel, automatic lid, heated seat and built-in bidet, the “Neorest” is the

Briefing

World trade: Unpredictable tides World trade is no longer collapsing and fears of rampant protectionism have not been realised. Even so, the way to revival looks far from smooth THE worst global economic slump since the Depression has generated reams of mind-boggling numbers. Among the starkest—and the most worrying—have been measures of world trade. According to t

$€£¥¤α Finance and economics

Germany's looming credit crunch: A reluctant patient Europe’s biggest economy has largely escaped the squeeze. Not for much longer ONE of the hardest tasks doctors face is convincing an outwardly well patient that he needs drastic treatment. So too with Germany’s financial system. By most measures, the flow of credit has hel Buttonwood: Cold comfort The economic impact of swine flu may not be that bad ATISHOO, atishoo, we all fall down. On July 20th the Ernst & Young ITEM Club, a forecasting group, warned that swine flu could knock 3% off Britain’s economic output this year. The FTSE 100 s CIT's punitive private rescue: Afloat but not buoyant CIT averts bankruptcy, for a while at least JUST as the scale of the subprime-mortgage crisis hit home in the summer of 2007, CIT sponsored a lavish ball on the Queen Mary 2, docked at the time in New York. Now the company is struggling to stay American tax policy in Asia: In their sights America’s revenue-collection schemes are causing concern in the region Offshore attackDESPERATE for revenue to pay for vast spending plans, America is targeting a group that it, alone among developed countries, brings under its tax umbrella: citizens and firms living and Reforming finance: Rating agencies: Downgraded Rating firms could lose their special status. The latest in our series IF THE past decade’s financial over-engineering was a crime, rating agencies were the getaway drivers. The punishment for putting their stamp of approval on collateralised-debt obligations, bond Iceland's banking crisis: Pelt tightening A country staggers back to its feet Headquarters have been scaled backTINY Iceland was hit uniquely hard by the credit crisis. Its banks had assets eight times its GDP. When they collapsed it seemed that a life of fishing and harvesting Rebalancing the world economy: America: Dropping the shopping Can America wean itself off consumption? The first of a series on how the world’s four biggest economies must change to ensure sustainable global growth GENERAL ELECTRIC has historically been a manufacturer, but in the long boom leading up to the financial crisis it became more like a bank. Half its profit came from its finance arm, GE Capital, which a Economics focus: Great barrier grief Countries that clung fast to the gold standard in the early 1930s resorted most to protectionism ONE consequence of the worst economic crisis in 80 years is that dismal scientists everywhere have had to gen up on the Depression in order to contribute to the policy debate. Most have by now picked u

√&infin∑ ∫∂ Science & Technology

Diagnosing comas: Unlucky for some A newly published study suggests that a lot of people who have been diagnosed as being in a vegetative state are not in one LABELS matter. Indeed, they can be the difference between life and death. Someone lying in a hospital bed labelled “minimally conscious state” will be kept on life support indefinitely. If Solar energy in Israel: It's a knockout Two novel approaches to making electricity from sunlight ISRAEL is a country with plenty of sunshine, lots of sand and quite a few clever physicists and chemists. Put these together—having first extracted the oxygen from the sand, to leave pure silicon Creating mice from artificial stem cells: Clone rangers The technology of cloning is improving step by step THIS mouse is one of a batch that represent the latest breakthrough in cloning technology. It was created by Zhao Xiaoyang and Li Wei, of the Chinese Academy of Sciences in Beijing, and their colleague Superstition and finance: A total eclipse of the brain Superstitions make for less-than-super stockmarket returns The Dow is falling! The Dow is falling!MODERN stockmarkets, with their lightning trades and endless reams of data, sometimes seem to be run by automatons, not people. But lift the curtain and the wizar

“ ” Books & Arts

Andrew Roberts on the second world war: The road to hell A British historian argues that Hitler lost the war for the same reason that he unleashed it—because he was a Nazi The Storm of War: A New History of the Second World War. By Andrew Roberts. Allen Lane; 712 pages; £25. To be published in America by HarperCollins in 2011. Buy from Amazon.co.uk ONLY a highly co Alan Beattie's economic history: Whistle-stop tour False Economy: A Surprising Economic History of the World. By Alan Beattie. Riverhead Books; 336 pages; $26.95. Penguin; £20. Buy from Amazon.com, Amazon.co.ukTHE subtitle of Alan Beattie’s Frances Perkins: A life of labour The Woman Behind the New Deal: The Life of Frances Perkins, FDR’s Secretary of Labour and His Moral Conscience. By Kirstin Downey. Nan A. Talese; 458 pages; $35. Buy from Amazon.comWITH the world Richard Dawkins under fire: Ready, aim, miss The Selfish Genius: How Richard Dawkins Rewrote Darwin’s Legacy. By Fern Elsdon-Baker. Icon Books; 240 pages; £8.99. Buy from Amazon.co.ukIN THE year of Charles Darwin’s double annive Valery Gergiev's “Ring”: Caucasian circle Valery Gergiev gives his ill-fated “Ring” cycle yet another makeover Will the gods smile?EVEN at the heart of the Richard Wagner cult in Bayreuth, it takes nine days to stage the German composer’s four-part epic, “Der Ring des Nibelungen”. The demands

† Obituary

Walter Cronkite Walter Cronkite, newsman, died on July 17th, aged 92 THE best hours of Walter Cronkite’s life were not spent in a newsroom, or in pursuit of a story. They came after vigorous days of sailing his yawl Wyntje off the coast of Georgia or Maine. There

↑ ↓ Economic and Financial Indicators

Overview Ben Bernanke, the chairman of the Federal Reserve, gave his semi-annual Monetary Policy Report to Congress. He said that policy actions “may well have averted the collapse of the global financial Output, prices and jobs The Economist commodity-price index Agricultural subsidies The OECD estimates that its member countries spent $265 billion on farm subsidies in 2008. This was slightly more than a fifth of their farmers’ total earnings. Last year’s increase in food Trade, exchange rates, budget balances and interest rates Markets Stockmarket listings Just over 49,000 domestic companies were listed on the world’s stockmarkets in 2008, according to Standard & Poor’s, a rating agency. Of these, 54% were listed in rich countries. The nu