Archive for the ‘ The Economist: Daily news and views ’ Category

Carbon copies

Who is most reponsible for carbon emissions?

THAT rich countries have already produced more than their fair share of global carbon-dioxide emissions is one fact complicating negotiations for a new global climate-change treaty. In its annual “World Development Report” published on Tuesday September 15th, the World Bank notes that they accounted for 64% of global CO2 emissions from fossil fuels between 1850 and 2005. In 2005 itself, however, this share had fallen to 50%, and middle-income countries such as India and China (now the world’s biggest emitter) accounted for almost half of CO2 emissions and more than half of wider greenhouse-gas emissions. But rich countries’ 1 billion people emit far more on a per person basis compared with the 4.2 billion people who live in middle-income countries. The report notes that by reducing their own heavy carbon footprints and investing in new technology, rich countries would be more effective in persuading poorer countries to do likewise.

Friends in low places

Hugo Chavez dreams of forging a new world order

THE mountains and jungles of South America are not ideal terrain for tank warfare. So it is hard to envisage what role Venezuela’s president, Hugo Chavez, has in mind for the dozens of Russian tanks on his latest military shopping list. The strategic purpose of a recent tour that took him to some of the world’s least salubrious regimes is, however, easier to discern. And it led America’s State Department to give warning on Monday September 14th of a “serious challenge to stability” in the region.

Venezuela’s increasingly autocratic leader returned on Friday from a trip that took him to Libya, Iran, Algeria, Syria, Turkmenistan, Belarus and Russia, though he also found time for a visit Spain and the Venice film festival. On his jaunt he was decorated by Libya’s leader, Muammar Qaddafi, and embraced by Aleksandr Lukashenko, president of Belarus. …

A balancing act

Oman preserves friendly ties with both Iran and the West

The Omani ruler, Sultan Qaboos bin Said al-Said, was the first head of state to visit Iran after the controversial re-election of Mahmoud Ahmadinejad in June. His discussions included a proposal for Iran to pump gas to the Gulf Arab state, some of which could be exported using Oman’s liquefied natural gas (LNG) facilities. At the same time, Oman is one of the longest-standing and most reliable allies of the West in the Middle East, and it is said to be close to finalising a major order to upgrade its air force with Eurofighter Typhoons.

Reports have resurfaced in the press that Oman is in discussions with the British government over the purchase of 24 Typhoon jets, with talk of an agreement being finalised within the next few months. Speculation about a possible deal has been rife for almost a year, but a report in a recent edition of the Gulf States Newsletter suggests that negotiations could be close to a conclusion. The Eurofighter Typhoon is built by a consortium of European aerospace manufacturers, including the UK’s BAE Systems. …

The age of hostility

The new merger wave may bring more hostile takeovers than ever

THE battle for Cadbury is already turning nasty. One week after Kraft, an American food conglomerate, made an unsolicited bid for it, the British confectioner hit back on September 12th. Roger Carr, Cadbury’s chairman, wrote an open letter in which he described the bid as an “unappealing prospect” that would serve only to lock the chocolate-maker into Kraft’s “low growth, conglomerate business”. Kraft says it is pressing on regardless. It is expected to have to improve its terms to win over Cadbury’s shareholders. Officially, Kraft’s offer is friendly. Irene Rosenfeld, its chief executive, says she looks forward to “constructive dialogue” with Cadbury. But in reality the moment Kraft made public its rejected offer, the bid became hostile. In this respect, it may mark the start of a trend.

Kraft’s offer for Cadbury is one of several recent signs that life is returning to the mergers and acquisitions (M&A) business. Executives and investment bankers have returned from their summer holidays in better spirits, confident that even if recovery may be slow the worst is over for the economy and that credit is becoming available. Share prices, though off their lows, look cheap by historic standards. These are ideal conditions for a new merger wave to form. …

Eastward bound

Our Europe editor joins an annual talk shop in Russia

THE Valdai club, which brings around 50 journalists, academics and other experts to Russia, is now in its sixth year. Each year it takes the group to a remote part of the country. It would be hard to find anywhere less accessible than Yakutia, in eastern Siberia, where this year’s Valdai starts.

Yakutia is Russia’s biggest region, with an area almost as big as India. Most of it consists of permafrost, but temperatures range from 40 degrees Celsius to 70 degrees below zero: the widest range on earth. The population is less than 1m. …

The promised bland

Barack Obama marks a year since the collapse of Lehman Brothers with a speech to Wall Street

“THIS sucker could go down.” George Bush’s verdict during the worst of the financial crisis a year ago was crude but penetrating. Barack Obama, delivering a speech in New York on September 14th to mark the anniversary of Lehman Brothers’ failure, managed the opposite trick. He produced plenty of elegant phrases but little that was new, and quite a bit that was confusing.

To be fair, this was not an occasion for detailed policy pronouncements. The big areas of financial reform have been endlessly rehearsed in speeches, summits and papers (which may explain why the occasion felt a little flat). This was more about applying a bit of presidential pressure. By sketching out the rationale behind his principal legislative proposals—a systemic-risk regulator, a new consumer-protection agency, the need for strong capital and better resolution regimes—he reminded Congress that health care is not his only priority. He also used his time at the podium to chide bonus-hungry bankers for failing to learn the lessons of Lehman. …

A spotless record

The sun has gone quiet

IT IS almost exactly 400 years since Galileo turned his telescope on the sun and saw it to be an imperfect orb covered in spots, quite unlike the teachings of Greek cosmology. If his observations had been made four centuries later, he would have drawn a different conclusion. The sun has recently shed its spots, prompting sceptics to renew their claims that climate change is not anthropogenic but rather heliogenic.

Sunspots are a bit of a mystery. They appear as dark patches in the photosphere—the surface layer of the sun—that come and go. Normally the number of sunspots peaks every 11 years, coinciding with times when the sun’s magnetic field is at its strongest. As the field wanes, the number of sunspots falls to a trough at which point the sun’s magnetic field reverses direction and starts to regain its strength. …

Late in, first out

Brazil is the first Latin American country to emerge from recession

Brazil is the first Latin American country to emerge from recession—and one of the earliest among the G-20 countries to have done so—following a 1.9% quarter-on-quarter expansion in economic activity in the April-to-June period. Whereas the global environment remains difficult and the export sector therefore continues to struggle, the strength of domestic demand has propelled the economy to the start of a recovery.

The second-quarter rebound came after two consecutive quarters of shrinkage (1% in the first three months of 2009 and 3.4% in the last three months of 2008), which had put Brazil into a technical recession. This relatively short recession was the first for Brazil since 2003. The quick economic rebound is attributable to the strength of domestic demand, particularly household expenditure, which grew by 2.1% in the second quarter. Exports of goods and services grew by 14.1%, while imports rose by 1.5%, government consumption grew barely, at 0.1%, while gross fixed investment was flat quarter on quarter. …

Wearing thin

How strong is Barack Obama’s belief in free trade?

ALTHOUGH Barack Obama alarmed free traders last year with protectionist-sounding pronouncements on the campaign trail, such as one about the need to renegotiate NAFTA, optimists among them dismissed this as mere posturing designed to placate restive trade unions. Yet a decision by the White House to impose punitive tariffs (35% for the first year, falling by five percentage points a year, to 25% in the third year) on Chinese-made pneumatic tyres now raises serious doubts about Mr Obama’s commitment to free trade.

The duties are to be imposed on September 26th under a part of American trade law known as “Section 421”. The American government argues that these tyres are being imported into America from China in “such increased quantities and under such conditions as to cause or threaten to cause market disruption to domestic producers” of competing tyres. …

A closer contest?

A televised debate in Germany gives a boost to the election campaign

FRANK-WALTER STEINMEIER, Germany’s foreign minister, is unlikely to become chancellor after parliamentary elections are held in two weeks’ time. But he delivered a decent performance in the only televised debate of the campaign on Sunday September 13th against the incumbent, Angela Merkel. He may have done enough to make the election a tighter contest.

Mr Steinmeier’s Social Democratic Party (SPD) is trailing in the polls more than ten points behind Ms Merkel’s Christian Democratic Union (CDU), its partner in the “grand coalition government”. A long-time bureaucrat who has never run for public office, Mr Steinmeier needed to convince sceptical voters that he has the heft to do Ms Merkel’s job. Realistically, he is hoping just to do well enough to deny the CDU a chance to govern with its preferred coalition partner, the liberal Free Democratic Party (FDP). …