《大学英语》课程综合教程教学资源（外刊选读）Economist-15-05-23

Elizabeth Warren'sdangerous appealTheSaudi:new leader of the Arab worldEconomistTaming Scotland's BraveheartsSamsung's softly-softlysuccessionHome-brewedheroinMAY23RD-29TH2015Economist.comIndia's one-man bandASPECIALREPORTONNARENDRAMODI'SFIRSTYEAR

India’s one-man band Elizabeth Warren’s dangerous appeal Saudi: new leader of the Arab world Taming Scotland’s Bravehearts Samsung’s softly-softly succession MAY 23RD–29TH 2015 Economist.com Home-brewed heroin

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TheEconomist May23rd2015Contents6 TheworldthisweekAsia31 South Korea's orphansFlawed legislationLeaders32Taiwan and China9 Modi's ruleHistoric pipelineIndia's one-man band33Rohingya boatpeople10 ScottishnationalismMyanmar'sshameHow to scotch it34Banyan10 UkraineThepolitics ofThe other battlegroundpeople-trafficking12GeopoliticsintheGulfSaudiArabia Chaos in theThe new SaudisMiddle EastcaststhekingdomChina13 Financial crimesastheArabworld's main35Human rightsUnfaircoppower:leader,page12.TheJailing grassroots lawyersOnthecovernewrulerswanttoincrease36PropagandaIndia has a goldenSaudi Arabia's clout.TheyfaceLettersAfilm starring Dengopportunitytotransforma hardtask,pages17-20.The14Ondrugspolicy,Scotland,itself.NarendraModirisksfallof RamadiandPalmyra36 ConservationAmtrak, leadership,missingit:leader,page9.showshowdangerousIslamicOld trees,newtechnologyshoesTheprimeministerhas grandStateremains,page37ambitionsforhiscountry,MiddleEast and Africaand self-confidencetoBriefingmatch.But hehas yetto37IslamicState17SaudiArabiashowhowhewill bringaboutThe caliphate strikes backThe challengedkingdomchange,saysourspecial38 Egyptian footballreportafterpage40RedcardfortheultrasUnitedStates38 Israel'sforeign relations21 ThePatriotActNetanyahu contra mundumThe EconomistonlineReviewing the surveillance39 Refugees in LebanonstateDailyanalysis and opinion toOutstaying their welcome22Philadelphia's next mayorsupplementtheprintedition,plus40BurundiHard graft endangeredaudio andvideo,andadailychartGoodcoup,badcoupEconomist.com22ADXFlorenceScotland Giving it fiscal40 The African DevelopmentThe terrorists'prisonE-mail:newsletters andautonomywouldimproveBankmobileedition23ThebikerbrawlinWacogovernance-andcouldalsoRiskonEconomist.com/emailRotarians with chains onweakendemandstobreakPrintedition:available onlinebyawayfrom Britain:leader,23 Chicago's gun violenceSpecial report:India7pm Londontimeeach Thursdaypage10.Ridinghigh,ScottishWhat's in a name?Economist.com/printModi's manytasksnationalists ponderwhen next24 American familiesAfterpage40to pushforindependence,Audioedition:availableonlineHaving it all, and thenpage46.NotetoScotland,fromto downtoad each FridaysomeEconomist.com/audioeditionQuebec:supportfornationalismEurope25Hope,Arkansascanfall,too,page27Something in the water41 Europe's Green parties26LexingtonVerdant pasturesTheWhat Elizabeth Warren42 Eurosceptics in EuropeEconomistwantsKEEPRift on therightLEFTVolume 415 Number 893942 Ukraine'sfront lineTheAmericasLongingforsilencePublished since September184343 Mediterranean migrants27 Separatismin Quebectotake partin"asevere contestbetweenintelligence, which presses fonward, andAsplash of bravadoNo, we shouldn'tan unworthy,timid ignoranceobstructingourprogress.44 Schools in Italy28 Guyana'selectionA class dividedITEEditorial offices in London and also:Atimeto healAtlanta,Beijing,Berlin, Brussels, Cairo44Franceandglobalsports28Sexual harassmentChicago, Hong Kong, Johannesburg, Lima,Los Angeles, Mexico City,Moscow, New Delhi,Ellipsoid beats sphereCriminalisingcatcallersNewYork, Paris, San Francisco, Sao Paulo,Elizabeth Warren What does29 Bello45 CharlemagneSingapore, Tokyo, Washington DCshe want?It'snottheThe Chinese chequebookAnd then there werefourpresidency,andforgoodreason:Lexington,page26She is wrongaboutmanythings,butonfinancialcrimeshehas a point:leader,page13Contents continuesoverleaf

The Economist May 23rd 2015 3 Daily analysis and opinion to supplement the print edition, plus audio and video, and a daily chart Economist.com E-mail: newsletters and mobile edition Economist.com/email Print edition: available online by 7pm London time each Thursday Economist.com/print Audio edition: available online to download each Friday Economist.com/audioedition The Economist online Volume 415 Number 8939 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 offices in London and also: Atlanta, Beijing, Berlin, Brussels, Cairo, Chicago, Hong Kong, Johannesburg, Lima, Los Angeles, Mexico City, Moscow, New Delhi, New York, Paris, San Francisco, São Paulo, Singapore, Tokyo, Washington DC Contents continues overleaf Contents 1 Saudi Arabia Chaos in the Middle East casts the kingdom as the Arab world’s main power: leader, page 12. The new rulers want to increase Saudi Arabia’s clout. They face a hard task, pages 17-20. The fall of Ramadi and Palmyra shows how dangerous Islamic State remains, page 37 On the cover India has a golden opportunity to transform itself. Narendra Modi risks missing it: leader, page 9. The prime minister has grand ambitions for his country, and self-confidence to match. But he has yet to show how he will bring about change, says our special report after page 40 6 The world this week Leaders 9 Modi’s rule India’s one-man band 10 Scottish nationalism How to scotch it 10 Ukraine The other battleground 12 Geopolitics in the Gulf The new Saudis 13 Financial crimes Unfair cop Letters 14 On drugs policy, Scotland, Amtrak, leadership, shoes Briefing 17 Saudi Arabia The challenged kingdom United States 21 The Patriot Act Reviewing the surveillance state 22 Philadelphia’s next mayor Hard graft endangered 22 ADX Florence The terrorists’ prison 23 The biker brawl in Waco Rotarians with chains on 23 Chicago’s gun violence What’s in a name? 24 American families Having it all, and then some 25 Hope, Arkansas Something in the water 26 Lexington What Elizabeth Warren wants The Americas 27 Separatism in Quebec No, we shouldn’t 28 Guyana’s election A time to heal 28 Sexual harassment Criminalising catcallers 29 Bello The Chinese chequebook Asia 31 South Korea’s orphans Flawed legislation 32 Taiwan and China Historic pipeline 33 Rohingya boat people Myanmar’s shame 34 Banyan The politics of people-trafficking China 35 Human rights Jailing grassroots lawyers 36 Propaganda A film starring Deng 36 Conservation Old trees, new technology Middle East and Africa 37 Islamic State The caliphate strikes back 38 Egyptian football Red card for the ultras 38 Israel’s foreign relations Netanyahu contra mundum 39 Refugees in Lebanon Outstaying their welcome 40 Burundi Good coup, bad coup 40 The African Development Bank Risk on Special report: India Modi’s many tasks After page 40 Europe 41 Europe’s Green parties Verdant pastures 42 Eurosceptics in Europe Rift on the right 42 Ukraine’s front line Longing for silence 43 Mediterranean migrants A splash of bravado 44 Schools in Italy A class divided 44 France and global sports Ellipsoid beats sphere 45 Charlemagne And then there were four Scotland Giving it fiscal autonomy would improve governance—and could also weaken demands to break away from Britain: leader, page 10. Riding high, Scottish nationalists ponder when next to push for independence, page 46. Note to Scotland, from Quebec: support for nationalism can fall, too, page 27 Elizabeth WarrenWhat does she want? It’s not the presidency, and for good reason: Lexington, page 26. She is wrong about many things, but on financial crime she has a point: leader, page 13

ContentsTheEconomistMay23rd2015BritainScience and technology46Scotland67 Synthetic biologyTheviewfromthenorthHome-brewed heroin47Death in Surrey68DemocratisingmedicineSee no evilThecrowdwill seeyounow47Backtodeflation68 Theworld's oldesttoolA55-yearrollercoasterEarlyman48Bagehot68 Graphene supercapacitorsThe trials of Nigel FarageSheet lightning69 ExorcisingphotographicSamsung As heslowlytakesWaterloo Appallinglybloody,ghostsInternationalchargeof South Korea'slargestyet decisive,the battleofDoubletake49Developmentaidconglomerate,Lee Jae-yongWaterloo in June1815 is the70 Epidemics andartificialIt's not what you spendwill havea tougher job thansubject ofa fusillade of booksintelligence5o Philanthropyhisfather did nearly30 years200 yearslater.ItfullydeservesReservoirratsDoing good by doing wellago,page51.Atumbleintheattention,page71exportsfromAsia neednotBooks and artsspellgloomfortheworld,BusinessSubscription servicepage6071Battleof Waterloo51SamsungForourlatestsubscriptionoffers,visitAnear-run thingEconomist.com/offersThe soft successionForsubscriptionservice,pleasecontactby72 LaszloKrasznahorkai53 Hanergy's share pricetelephone,fax, web or mail at the detailsTranscendentalmeditationnrovidedbelowBurnedTelephone:1800456 6086 (from outside73 Self-regardtheuSand Canada,16364495702)53 France's nuclearindustryYou are not specialFacsimile:18668568075(fromoutsideArevadercitheUSand Canada,16364495703)73 Mediterranean historyWeb:Economistsubs.com54 ConstructioninBrazilCoasts and coalitionsE-mail:customerhelp@economist.comRepairjobPost:The EconomistSubscription74 Faulkneron stageServices, P.0. Box 4697855GamblinginMacauSignifying somethingSt.Louis,MO 63146-6978,USADoubling downSubscription for1year (51issues)55BombardierUnited StatesUS$16076 Economicand financialTurbulenceCanadaCNS165indicatorsUkraineTheWestshoulddoLatin AmericaUS$33856TechnologyfirmsStatistics on 42much moretohelp Ukraine'sKiwis as guinea pigseconomies,plusa closereconomy:leader,page1057Schumpeterlookat povertyratesPrincipalcommercialoffices:Ukraine'sgovernmentisManaging in an age of25StJames'sStreet,LondonSWIAHGmakingsomeprogress,butnotpartnershipsTel:02078307000enoughpage58.DiplomacyObituaryRue del'Athenee 32failsthefolk ontheedgein1206 Geneva, Switzerland78Ann BarrDonetsk,page42FinanceandeconomicsTel:41225662470Who Sloanes Wins58 Ukraine's economy7503rdAvenue,5thFloor,NewYork,NY10017Tel:12125410500War-torn reform60/F Central Plaza59Buttonwood8HaurWachaigBond markets reverseTel:8522585388860 Rigging the stockmarketOther.commercialoffices:AvonfallingChicago,Dubai,Frankfurt, LosAngelesParis,San Franciscoand Singapore60 AsianexportsAfaultygauge61 FinancialcrimeUnsettling settlements61EnergysubsidiesWaste not, harm notHome-brewed heroin62TacklingtaxevasionAmateurswill soonbeabletoAmerica the not so bravemakeopiatesfromnothingmorethanaspoonfulofyeast64Freeexchangeandabagofsugar,page67A"basicincome"for all?PEFCcertifiedThis copy of The Economis printed on paper sourcedfrom sustainably managedPEFCforests certified to PEFCPEFC/29-31-58www.pefc.orgrecyclewoasteaoepapreaaeieiaieteaetanaristatpatteaielateoratnittedin anyn orbyanymeans, electroniical, photeo.iagooutthepTThaE.750.3rdAork.NYaoosTheEonomistisaregisteredtrademarkofTheEconomistewspaper Limited.Periodicalspostagepaid atNewYork,andadditionalmailingofficesPosmaster SendaddresschangestoheEconomist,P0.Box 46978,St,Louis,M0.631466978,UCanadaPostpublicationsmail(Canadiandistribution)salesageemntno.4001233,ReuundelivrableCanadiamaddressestoTheconomist,PBox7258SA,Toronto,ONMWXg.GSTR2336267.PrintedbyQuad/Graphics,SaratogaSpring,Ys6

© 2015 The Economist Newspaper Limited. All rights reserved. Neither this publication nor any part of it may be reproduced, stored in a retrieval system, or transmitted in any form or by any means, electronic, mechanical, photocopying, recording or otherwise, without the prior permission of The Economist Newspaper Limited. The Economist(ISSN 0013-0613) is published every week, except for a year-end double issue, by The Economist Newspaper Limited, 750 3rd Avenue, 5th Floor, New York, N Y 10017. The Economist is a registered trademark of The Economist Newspaper Limited. Periodicals postage paid at New York, NY and additional mailing offices. Postmaster: Send address changes to The Economist, P.O. Box 46978, St. Louis , MO. 63146-6978, USA. Canada Post publications mail (Canadian distribution) sales agreement no. 40012331. Return undeliverable Canadian addresses to The Economist, PO Box 7258 STN A, Toronto, ON M5W 1X9. GST R123236267. Printed by Quad/Graphics, Saratoga Springs, NY 12866 PEFC certified This copy of The Economist is printed on paper sourced from sustainably managed forests certified to PEFC PEFC/29-31-58 www.pefc.org Subscription service For our latest subscription offers, visit Economist.com/offers For subscription service, please contact by telephone, fax, web or mail at the details provided below: Subscription for 1 year (51 issues) United States US$160 Canada CN$165 Latin America US$338 Telephone: 1 800 456 6086 (from outside the US and Canada, 1 636 449 5702) Facsimile: 1 866 856 8075 (from outside the US and Canada, 1 636 449 5703) Web: Economistsubs.com E-mail: customerhelp@economist.com Post: The Economist Subscription Services, P.O. Box 46978, St. Louis, MO 63146-6978, USA Principal commercial offices: 25 St James’s Street, London sw1a 1hg Tel: 020 7830 7000 Rue de l’Athénée 32 1206 Geneva, Switzerland Tel: 41 22 566 2470 750 3rd Avenue, 5th Floor, New York, NY 10017 Tel: 1 212 541 0500 60/F Central Plaza 18 Harbour Road, Wanchai, Hong Kong Tel: 852 2585 3888 Other commercial offices: Chicago, Dubai, Frankfurt, Los Angeles, Paris, San Francisco and Singapore 4 Contents The Economist May 23rd 2015 Samsung As he slowly takes charge of South Korea’s largest conglomerate, Lee Jae-yong will have a tougher job than his father did nearly 30 years ago, page 51. A tumble in exports from Asia need not spell gloom for the world, page 60 Ukraine The West should do much more to help Ukraine’s economy: leader, page 10. Ukraine’s government is making some progress, but not enough page 58. Diplomacy fails the folk on the edge, in Donetsk, page 42 Home-brewed heroin Amateurs will soon be able to make opiates from nothing more than a spoonful of yeast and a bag of sugar, page 67 Waterloo Appallingly bloody, yet decisive, the battle of Waterloo in June 1815 is the subject of a fusillade of books 200 years later. It fully deserves the attention, page 71 Britain 46 Scotland The view from the north 47 Death in Surrey See no evil 47 Back to deflation A 55-year rollercoaster 48 Bagehot The trials of Nigel Farage International 49 Development aid It’s not what you spend 50 Philanthropy Doing good by doing well Business 51 Samsung The soft succession 53 Hanergy’s share price Burned 53 France’s nuclear industry Arevaderci 54 Construction in Brazil Repair job 55 Gambling in Macau Doubling down 55 Bombardier Turbulence 56 Technology firms Kiwis as guinea pigs 57 Schumpeter Managing in an age of partnerships Finance and economics 58 Ukraine’s economy War-torn reform 59 Buttonwood Bond markets reverse 60 Rigging the stockmarket Avon falling 60 Asian exports A faulty gauge 61 Financial crime Unsettling settlements 61 Energy subsidies Waste not, harm not 62 Tackling tax evasion America the not so brave 64 Free exchange A “basic income“ for all? Science and technology 67 Synthetic biology Home-brewed heroin 68 Democratising medicine The crowd will see you now 68 The world’s oldest tool Early man 68 Graphene supercapacitors Sheet lightning 69 Exorcising photographic ghosts Double take 70 Epidemics and artificial intelligence Reservoir rats Books and arts 71 Battle of Waterloo A near-run thing 72 Laszlo Krasznahorkai Transcendental meditation 73 Self-regard You are not special 73 Mediterranean history Coasts and coalitions 74 Faulkner on stage Signifying something 76 Economic and financial indicators Statistics on 42 economies, plus a closer look at poverty rates Obituary 78 Ann Barr Who Sloanes Wins

8With Central Bank stimulus,wise to put your focus on Europe?PutBlackRockinsightstoworkwithiSharesfundsInsight:Europeanstocks maybenefitfromtheEuropeanCentral Bank's stimulus and a currencytailwind.TheECB'smassivebond-buyingmaycontinuetoencouragebond investorstomoveintostocks.1二Aweakereuroisexpectedtohelpboostdollar-basedearningsfortheregion'sexporters.Germany'sstrong,export-orientedeconomymaybewell-positionedto benefitfromthesetrends.2Action:ConsiderhedgedexposuretoGermanstocksasanentrywaytopotential Europeanmomentum.Insightintoaction.iSharesCurrencyHEZUHedgedMSCIiShares.com/iThinkingEMUFundiSharesCurrencyHedgedMSCIHEWGGermanyFundiShares'byBLACKROCK'BlackRock is trustedtomanagemoremoneythanany otherinvestmentfirm intheworld.31.European Central Bank,as of 1/22/15. Bond-buving program expected to exceed S1.1T.2.Bloomberg:as of 3/20/15; as measured in size and contribution to eurozone GDP.3. Based on $4.774T in AUMasof 3/31/15.Visitwww.iShares.comorwww.BlackRock.comtoviewa prospectus,which includes investmentobjectives,risks,fees,expenses andotherinformationthat youshouldreadandconsidercarefullybeforeinvesting,Risk includesprincipalloss.intemational investing involvesrisks.including risksrelatedtoforeigncurrency,Limited liquidityless govermmenregulationhssibilityfubstantialolatlityuoliticalonmicrthrdelopmntshriskstenreheighteneoismnnnenrationsingeountrThe Fund's use of derivatives may reduce returns and/or increase volatility and subjectthe Fund to counterparty risk,which is therisk that the other party in the transaction willnotfulfill itscontractualobligation.TheFundcouldsufferlossesrelatedto itsderivativepositionsbecauseofapossiblelackofliquidityinthesecondarymarketandasaresultofunanticipatedmarketmovementsSuchlosses are potentially unlimited, There canbeno assurance that theFund's hedging transactions will beeffective.-Thismaterial represents an assessment of the market environment as of5/13/n15and isnot intendedtobeaforecast offutureeventsoraguaranteeoffutureresuits.This information shouldnotberelied uponbythe readeras researchorinvestment advice regarding thefunds orany issuer or security in particutar.Fundsdistributed by BlackRock Investments, LLC (BRIL).The iSharesFunds are not sponsored,endorsed,issued,soldorpromoted by MSCl Inc.,nordoesthiscompanymakeanyrepresentationregardingtheadvisabiltvofinvestingintheFunds.BRILisnotaffliatedwith.MSClInc.2015BlackRock,Inc.Allrightsreserved.iSHARESandBLACKROCKareregisteredtrademarksofBlackRock.lnc.oritssubsidiaries.is-f5213-05

With Central Bank stimulus, wise to put your focus on Europe? 1. European Central Bank, as of 1/22/15. Bond-buying program expected to exceed $1.1T. 2. Bloomberg, as of 3/20/15; as measured in size and contribution to eurozone GDP. 3. Based on $4.774T in AUM as of 3/31/15. Visit www.iShares.com or www.BlackRock.com to view a prospectus, which includes investment objectives, risks, fees, expenses and other information that you should read and consider carefully before investing. Risk includes principal loss. International investing involves risks, including risks related to foreign currency, limited liquidity, less government regulation and the possibility of substantial volatility due to adverse political, economic or other developments. Q These risks often are heightened for investments in concentrations of single countries. Q The Fund’s use of derivatives may reduce returns and/or increase volatility and subject the Fund to counterparty risk, which is the risk that the other party in the transaction will not fulfill its contractual obligation. The Fund could suffer losses related to its derivative positions because of a possible lack of liquidity in the secondary market and as a result of unanticipated market movements. Such losses are potentially unlimited. There can be no assurance that the Fund’s hedging transactions will be effective. Q This material represents an assessment of the market environment as of 5/13/15 and is not intended to be a forecast of future events or a guarantee of future results. Q This information should not be relied upon by the reader as research or investment advice regarding the funds or any issuer or security in particular. Funds distributed by BlackRock Investments, LLC (BRIL). The iShares Funds are not sponsored, endorsed, issued, sold or promoted by MSCI Inc., nor does this company make any representation regarding the advisability of investing in the Funds. BRIL is not affiliated with MSCI Inc.©2015 BlackRock, Inc. All rights reserved. iSHARES and BLACKROCK are registered trademarks of BlackRock, Inc., or its subsidiaries. iS-15213-0515 BlackRock is trusted to manage more money than any other investment firm in the world.3 Put BlackRock insights to work with iShares funds. Insight into action. iShares.com/iThinking HEZU iShares Currency Hedged MSCI EMU Fund HEWG iShares Currency Hedged MSCI Germany Fund Insight: European stocks may benefit from the European Central Bank’s stimulus and a currency tailwind. Q The ECB’s massive bond-buying may continue to encourage bond investors to move into stocks.1 Q A weaker euro is expected to help boost dollar-based earnings for the region’s exporters. Q Germany’s strong, export-oriented economy may be well-positioned to benefit from these trends.2 Action: Consider hedged exposure to German stocks as an entryway to potential European momentum

TheEconomist May23rd2015The world this weekheid.The defence ministry(pictured),who was ousted byThe prime minister, NikolaPoliticssaid it had introduced thethe armylast year,pleaded notGruevski,has been accused ofdirective as a security measure.guiltyat the startofatrialoncorruption andoforderingcharges of criminalnegligence.20,o0owiretapstobeplacedForcesloyalto the president ofon publicfigures.The politicalBurundi quasheda coupWithaCNNcrewfilmingonturmoil comessoonafterboard, America flewa surveil-attemptby several generals.clashes between police and anTheplottersappeared tobelance aircraftover China'slandethnic-Albaniangroupnearreclamationprojecton disput-theborder withKosovo thatactinginsupportofprotesterswho had taken to the streetsedislandsintheSouthChinaleft22 people dead.whenPresidentPierreSea.TheChinesehad warnedNkurunziza made efforts tothe Americans to stay awayIn anothergestureaimed atchange theconstitutiontofrom thearea,whichitconsid-reconcilingatroubledpast,Britain's Prince Charles shookstand fora thirdterm.ers to beits sovereign territory.hands with GerryAdams,aBoko Haram,a jihadist groupDuring his first visitto ChinaseniorIrish nationalist,ataThefall of Ramadi,the capitalthatoriginated in northernas India's primeminister,meetingin Ireland.The princeNarendra Modi and his Chi-ofIraq'slargestprovince,Nigeria,retookabordertownthen visited Mullaghmore,promptedfearsthatIslamicthathadbeenliberated bythenesecounterpartagreedtowhere his great-uncle,LouisState (is)wasagainmenacingNigerian army.work"proactively"to settleaMountbatten,wasmurderedBaghdad.TheIraqigovernlong-standingborderdispute.byanIRAbombin1979.ment,whose planstoretakeIt'sno joke for JokoMrModisaidthetwonationstheprovince have sufferedaIndonesia's president,Jokoshould bemore sensitive toSons ofanarchyserious setback,aremassingWidodo,received a politicaleach other'sinterests.foracounter-attack,relyingsetbackfollowingacourtheavilyon Shiamilitiagroupsruling which makes it unlikelyAnewera forGuyanacollectivelyknownas"Popthattheopposition GolkarDavid Granger, the formerular Mobilisation".Mean-party could join the rulingchiefof Guyana's army,waswhile,is fighters captured thecoalition.Golkar'smembersworninasthecountry'sship of the coalition wouldoasis city of Palmyra in Syria,president,ending23 years ofone ofthe world's greatgiveitamajorityin parliamentrulebythe People's Progres-archaeological sites.andthus helpthepassage ofsive Party.The election waseconomicreforms.fought largely on racial lines.Egypt'sformerpresident,TheoutgoingpartyissupMohammed Morsi,wasMalaysia and IndonesiaportedmainlybyGuyanese ofsentencedtodeathbyacourtIndian origin.Mr Granger,A brawl involving guns andagreedtogivetemporaryin Cairo.Last month he hadsheltertothousandsofRoh-whoisAfro-Guyanese,promknives between warringmoisestonarrow theracial divide.beensentencedto20years iningyamigrants,mainlyfromtorcycle gangs in Texas,theMyanmar,whohavebeenkeptMeanwhile,Exxon MobilBandidosand theCossacks,prisoninaseparatecaseLengthyappeals are expected.adrift at sea because of theannounceda"significant"oilresultedin the deaths of ninerefusal ofcountriesinthefind offthecoastof Guyana.bikers and the arrest of170Areportfromthe Paris-basedregion toletthem dock.others.The clash started at theInternational Federation forThousands of people in Gua-TwinPeaksrestaurantinWaco,Human Rights accusedtemalademonstratedagainstwheregangshad gathered toEgypt'ssecurityforcesofthecorruption in the capital, Gua-discuss bikers'rights.systematicuse ofsexual vio-temala City.The vice-presi-lenceagainstbothmaleanddent, Roxana Baldetti, hadAjuryhanded down adeathfemaleprisoners.already resignedfollowingsentencetoDzhokharTsarallegations that herprivatenaevforhisroleinthebombAfive-dayhumanitarian trucesecretarytookbribesin ex-ingof theBostonmarathon inin Yemen,whereSaudi Arabiachangeforreducingcustoms2013,inwhichthreepeoplehas been carrying out airwere killed andmanymoreduties.Prosecutorshave notstrikes against the Houthiaccused Ms Baldetti of anymaimed.Hisappealprocessrebels,whohave displacedthewrongdoing.Afterthe streetagainstthesentenceis likely togovernment,cametoanend.proteststhehead ofthe coun-take years.Bombingandfightingresumedtry's central bank was arrestedunabated.Thailand'smilitary-backedoverseparate bribery charges.The council in Los Angelesgovernmentpostponedgen-voted to increase the city'sAtleast78peoplediedin land-Binyamin Netanyahu, theeralelectionsforsix monthsminimumwageratefrom$9Israeliprimeministerorderedbeyondtheplanneddateofslidestriggered byheavyrainsanhourto$15by2020.AroundahalttoapilotprogrammeFebruary 2016.It says this is toinnorth-westernColombia.halfthecity'sworkforcecurthat in effect would have pre-allowtimeforareferendumtorentlyearnsless than s15.vented Palestinian workersbeheldonadraftconstitutionBad omens in the BalkansSeveralcities across Americafromreturningto theWestthat critics saywill ensuretheLarge pro-and anti-governhaveincreasedtheirminimumBank on Israeli publicbuses,armedforceswillbeabletomentdemonstrationswerewagesinresponsetoacamheld in Skopje,thecapital ofaftercriticssaidtheplanwasretainpoliticalinfluencepaigntoliftthefederal miniintendedtoseparateJewsfromThailand'sformerprimemin-Macedonia,eachattendedbymumwagefromitscurrentArabsandsmackedofapart-ister,Yingluck Shinawatratens ofthousands ofpeoplerate of$7.25

6 The Economist May 23rd 2015 1 The fall ofRamadi, the capital ofIraq’s largest province, prompted fears thatIslamic State (IS) was again menacing Baghdad. The Iraqi govern￾ment, whose plans to retake the province have suffered a serious setback, are massing for a counter-attack, relying heavily on Shia militia groups collectively known as “Pop￾ular Mobilisation”. Mean￾while, IS fighters captured the oasis city ofPalmyra in Syria, one ofthe world’s great archaeological sites. Egypt’s former president, Mohammed Morsi, was sentenced to death by a court in Cairo. Last month he had been sentenced to 20 years in prison in a separate case. Lengthy appeals are expected. A report from the Paris-based International Federation for Human Rights accused Egypt’s security forces ofthe systematic use ofsexual vio￾lence against both male and female prisoners. A five-day humanitarian truce in Yemen, where Saudi Arabia has been carrying out air strikes against the Houthi rebels, who have displaced the government, came to an end. Bombing and fighting resumed unabated. Binyamin Netanyahu, the Israeli prime minister, ordered a halt to a pilot programme that in effect would have pre￾vented Palestinian workers from returning to the West Bankon Israeli public buses, after critics said the plan was intended to separate Jews from Arabs and smacked ofapart￾heid. The defence ministry said it had introduced the directive as a security measure. Forces loyal to the president of Burundi quashed a coup attempt by several generals. The plotters appeared to be acting in support ofprotesters who had taken to the streets when President Pierre Nkurunziza made efforts to change the constitution to stand for a third term. Boko Haram, a jihadist group that originated in northern Nigeria, retooka border town that had been liberated by the Nigerian army. It’s no joke for Joko Indonesia’s president, Joko Widodo, received a political setbackfollowing a court ruling which makes it unlikely that the opposition Golkar party could join the ruling coalition. Golkar’s member￾ship ofthe coalition would give it a majority in parliament and thus help the passage of economic reforms. Malaysia and Indonesia agreed to give temporary shelter to thousands ofRoh￾ingya migrants, mainly from Myanmar, who have been kept adrift at sea because ofthe refusal ofcountries in the region to let them dock. Thailand’s military-backed government postponed gen￾eral elections for six months beyond the planned date of February 2016. It says this is to allow time for a referendum to be held on a draft constitution that critics say will ensure the armed forces will be able to retain political influence. Thailand’s former prime min￾ister, YingluckShinawatra (pictured), who was ousted by the army last year, pleaded not guilty at the start ofa trial on charges ofcriminal negligence. With a CNN crew filming on board, America flew a surveil￾lance aircraft over China’s land reclamation project on disput￾ed islands in the South China Sea. The Chinese had warned the Americans to stay away from the area, which it consid￾ers to be its sovereign territory. During his first visit to China as India’s prime minister, Narendra Modi and his Chi￾nese counterpart agreed to work“proactively” to settle a long-standing border dispute. Mr Modi said the two nations should be more sensitive to each other’s interests. A new era for Guyana David Granger, the former chiefofGuyana’s army, was sworn in as the country’s president, ending 23 years of rule by the People’s Progres￾sive Party. The election was fought largely on racial lines. The outgoing party is sup￾ported mainly by Guyanese of Indian origin. Mr Granger, who is Afro-Guyanese, prom￾ises to narrow the racial divide. Meanwhile, Exxon Mobil announced a “significant” oil find offthe coast ofGuyana. Thousands ofpeople in Gua￾temala demonstrated against corruption in the capital, Gua￾temala City. The vice-presi￾dent, Roxana Baldetti, had already resigned following allegations that her private secretary tookbribes in ex￾change for reducing customs duties. Prosecutors have not accused Ms Baldetti ofany wrongdoing. After the street protests the head ofthe coun￾try’s central bankwas arrested over separate bribery charges. At least 78 people died in land￾slides triggered by heavy rains in north-western Colombia. Bad omens in the Balkans Large pro- and anti-govern￾ment demonstrations were held in Skopje, the capital of Macedonia, each attended by tens ofthousands ofpeople. The prime minister, Nikola Gruevski, has been accused of corruption and ofordering 20,000 wiretaps to be placed on public figures. The political turmoil comes soon after clashes between police and an ethnic-Albanian group near the border with Kosovo that left 22 people dead. In another gesture aimed at reconciling a troubled past, Britain’s Prince Charles shook hands with Gerry Adams, a senior Irish nationalist, at a meeting in Ireland. The prince then visited Mullaghmore, where his great-uncle, Louis Mountbatten, was murdered by an IRAbomb in 1979. Sons of anarchy A brawl involving guns and knives between warring mo￾torcycle gangs in Texas, the Bandidos and the Cossacks, resulted in the deaths ofnine bikers and the arrest of170 others. The clash started at the Twin Peaks restaurant in Waco, where gangs had gathered to discuss bikers’ rights. A jury handed down a death sentence to Dzhokhar Tsar￾naev for his role in the bomb￾ing ofthe Boston marathon in 2013, in which three people were killed and many more maimed. His appeal process against the sentence is likely to take years. The council in Los Angeles voted to increase the city’s minimum wage rate from $9 an hour to $15 by 2020. Around halfthe city’s workforce cur￾rently earns less than $15. Several cities across America have increased their minimum wages in response to a cam￾paign to lift the federal mini￾mum wage from its current rate of$7.25. Politics The world this week

TheEconomist May23rd2015The world this weekata healthypace, butthemainAfterafewmonths inthelinked to metal shards beingBusinessfactorbehind therobustGDpdoldrums, America'shousehurled from Takata's airbagsfigure was a build-up in inven-buildingindustrycelebratedwhen they inflate.Aninvestigationintothetories. This could spell troubleasthenumberofhomesonrigging of foreign-exchangeifconsumerdemanddoesnotwhichconstruction startedSouth32,a companyspunoffrates concludedwithmorematch the supply of goodsrose inApril by20.2%combyBHpBillitontohousesomewhoppingfinesforbanks.piling up in warehouses. Still,pared with March, the biggestofitspoorer-performingmin-Barclays, Citigroup,JPMorganthe news helpedto drive theingassets,such asaluminium,suchincreasesinceFebruaryChaseand Royal Bank ofNikkei stockmarketindex to its1991.Busier constructionwork-madealacklustre debut on theScotland agreedtopaymorehighest close since April 2000.erswereprobablyonefactorAustralian stockmarket (it didbehind HomeDepot, Ameri-thans5billionincombinedbetterin secondary listings inpenaltiesto settle with Ameri-Grab yourbargainsca's biggest DIY chain,ratch-London andjohannesburg).can and British authorities andeting up a quarterly net profitNamed afterthe line oflat-Britain's consumerpricespleaded guiltyto criminalofsi.6billion,a14%increaseitudealong which BHp'smain%changeonayear earlieron the sameperiod lastyear.charges.BankofAmericapaidassetsarelocatedinAustraliaa$205mfinebutwasnotandSouthAfrica,South32criminally charged.NeitherHavingshaken up theteleended its firstday oftradingvalued at Asn billion ($g bil)wasuBs,but itwasgivenacomsindustryinhisnativeUPPERLINT$342mfine.ItsimmunityfromFrance,PatrickDrahienteredlion),towardsthelowerendofOCthe American marketfortheanalysts'expectations.prosecutionoverLIBORwasLOWERLIMITalsorescindedanditwasfirsttimewhenhisAlticehandedapenaltyofs203mforRationalconsumersgroupboughta7o%stakeir20040615081012that episode.The traders whoSuddenlink,acableoperator,Walmart's earningsfortheSource:ONSBankofEnglandtargetmanipulated theforex ratesinadeal valuedatsg.ibillion.firstquarterdisappointedcommunicatedviaachatBritain dippedintodeflationMr Drahi's ambitions don'tinvestors,sendingitsshareroom,sendingeachotherinApril-consumerpricesstop there.He isalso rumouredpricedownby4.4%inadaycomicallyself-incriminatingwere0.1%lowerthan inthetobeinterestedinmakingathe mostforthreeyears. AbidforTimeWarnerCable,messages such as"if you ain'tsamemonthlastyear.Thestrongerdollar causedrevenuecheating,youain'ttrying"BankofEngland'sinflationwhichrecentlysawitsagreedtoremainflatatsii5billiontarget is 2%.Like other coun-takeoverbyComcastfall apartcomparedwiththesameAGerman exit?tries,Britain has been flirtingoverantitrust concerns.period last year.Butthe retail-DeutscheBank said it hadwithdeflationformonthser'schiefexecutive,Dougcreateda workinggrouptobecauseofloweroil prices.ButTakata,aJapanesecompanyMcMillon,reckonsAmericanconsiderrelocatingpartsof itsthegovernmentispointingoutwhichmakessparepartsforshoppers justaren'tspendingthe benefits to households ofoperationsinBritainelse-cars,doubledits recall inthewaytheyusedtoandwhere should thecountryvotewhat it insists will be atempo-Americaofvehicles withitsputting anyextra money theytoleavethe EuropeanUnion inraryfall inprices,drawingaairbagsinstalledto34m,mak-gaintowardspayingdowndistinction with thelongerareferendumpromisedbytheing itthebiggestsafetyrecall todebtorboostingsavings.periodsof damagingdeflationdatein the American carin-Conservativesattherecentelection.TheGermanbankthathave occurredelsewhere,dustry.The deaths of six peoOthereconomicdataandnewsemploys9,ooopeopleincan be found on pages 76-77suchasJapan.pleworldwidehavebeenBritain.Businessleadersthisweekcalledonthegovernmenttobringthereferendumforward from2017tolessen theSOWEPLANANDSTOPperiod of uncertainty.TODISRUPTTHEBONTSWEHATETHESMUGGLINGDEFOREOUENETWORKS.THESTrading in shares of HanergyDEPARTTERRIELEThinFilm,a solar-panel comPAINXNDpany,weresuspendedontheSUFERINGATSSAHong KongstockmarketafterTHEN FINALLYtheir pricefell by 47% within 25YOURminutes.The next day sharesTERRIBLEPAINintwo units of Goldin,a HongAND SUFFERING.CRRMNDYKongfinanceandpropertygroup,alsofell dramatically.71BothcompaniesinsistedthatWOULDBEtheirbusinesseswereoperatSAFELYing normally,and itwas un-HIDDENABROADclearaswewenttopressiftherewasany linkbetweenthefalls in their shares.Japan'seconomygrewinthefirst quarterby abetter-thanaveforecast2.4%atanannualisedrate.Exports,privateconsumptionand investmentincreased

The Economist May 23rd 2015 The world this week 7 Other economic data and news can be found on pages 76-77 An investigation into the rigging of foreign-exchange rates concluded with more whopping fines for banks. Barclays, Citigroup, JPMorgan Chase and Royal Bankof Scotland agreed to pay more than $5 billion in combined penalties to settle with Ameri￾can and British authorities and pleaded guilty to criminal charges. BankofAmerica paid a $205m fine but was not criminally charged. Neither was UBS, but it was given a $342m fine. Its immunity from prosecution over LIBOR was also rescinded and it was handed a penalty of$203m for that episode. The traders who manipulated the forex rates communicated via a chat room, sending each other comically self-incriminating messages such as “Ifyou ain’t cheating, you ain’t trying”. A German exit? Deutsche Bank said it had created a working group to consider relocating parts of its operations in Britain else￾where should the country vote to leave the European Union in a referendum promised by the Conservatives at the recent election. The German bank employs 9,000 people in Britain. Business leaders this weekcalled on the govern￾ment to bring the referendum forward from 2017 to lessen the period ofuncertainty. Trading in shares ofHanergy Thin Film, a solar-panel com￾pany, were suspended on the Hong Kong stockmarket after their price fell by 47% within 25 minutes. The next day shares in two units ofGoldin, a Hong Kong finance and property group, also fell dramatically. Both companies insisted that their businesses were operat￾ing normally, and it was un￾clear as we went to press if there was any linkbetween the falls in their shares. Japan’s economy grew in the first quarter by a better-than￾forecast 2.4% at an annualised rate. Exports, private consump￾tion and investment increased at a healthy pace, but the main factor behind the robust GDP figure was a build-up in inven￾tories. This could spell trouble ifconsumer demand does not match the supply ofgoods piling up in warehouses. Still, the news helped to drive the Nikkei stockmarket index to its highest close since April 2000. Grab your bargains Britain dipped into deflation in April—consumer prices were 0.1% lower than in the same month last year. The BankofEngland’s inflation target is 2%. Like other coun￾tries, Britain has been flirting with deflation for months because oflower oil prices. But the government is pointing out the benefits to households of what it insists will be a tempo￾rary fall in prices, drawing a distinction with the longer periods ofdamaging deflation that have occurred elsewhere, such as Japan. After a few months in the doldrums, America’shouse￾building industry celebrated as the number ofhomes on which construction started rose in April by 20.2% com￾pared with March, the biggest such increase since February 1991. Busier construction work￾ers were probably one factor behind Home Depot, Ameri￾ca’s biggest DIY chain, ratch￾eting up a quarterly net profit of$1.6 billion, a 14% increase on the same period last year. Having shaken up the tele￾coms industry in his native France, PatrickDrahi entered the American market for the first time when his Altice group bought a 70% stake in Suddenlink, a cable operator, in a deal valued at $9.1billion. Mr Drahi’s ambitions don’t stop there. He is also rumoured to be interested in making a bid for Time Warner Cable, which recently saw its agreed takeover by Comcast fall apart over antitrust concerns. Takata, a Japanese company which makes spare parts for cars, doubled its recall in America ofvehicles with its airbags installed to 34m, mak￾ing it the biggest safety recall to date in the American car in￾dustry. The deaths ofsix peo￾ple worldwide have been linked to metal shards being hurled from Takata’s airbags when they inflate. South32, a company spun off by BHP Billiton to house some ofits poorer-performing min￾ing assets, such as aluminium, made a lacklustre debut on the Australian stockmarket (it did better in secondary listings in London and Johannesburg). Named after the line oflat￾itude along which BHP’s main assets are located in Australia and South Africa, South32 ended its first day oftrading valued at A$11billion ($9 bil￾lion), towards the lower end of analysts’ expectations. Rational consumers Walmart’s earnings for the first quarter disappointed investors, sending its share price down by 4.4% in a day, the most for three years. A stronger dollar caused revenue to remain flat at $115 billion compared with the same period last year. But the retail￾er’s chiefexecutive, Doug McMillon, reckons American shoppers just aren’t spending the way they used to and putting any extra money they gain towards paying down debt or boosting savings. Business Britain’s consumer prices Source: ONS *Bank of England target % change on a year earlier 2004 06 08 10 12 15 0 + – 1 1 2 3 4 5 6 UPPER LIMIT LOWER LIMIT TARGET*

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TheEconomistMay23rd2015LeadersIndia's one-man bandThecountryhasagoldenopportunitytotransformitself.NarendraModirisksmissingitYEARagoNarendraModidatepowerfirstandreformlater.InfactabriefperiodexistsinIcametoofficepromisingtowhichtogetchangegoing,earlyintheparliamentaryterm.bring India"good times",byMrModialreadyfacestwingesofpopulardiscontent.Surlywhichhemeantjobs,prosperityvotersdrummedhispartyoutinstateelectionsinDelhi.Somedislike his attention to diplomacy overseas.Thisweek heand international renown.Hisprogresshas been frustratinglywrappedupatriptoChina,MongoliaandSouthKorea,comslow.The problem is hardly apleting52daysabroadini8countriesoverthepastyear.Otherslackofopportunity.Votersgaveareputoff byhisnarcissism,embarrassed thathemetAmeri-his BharatiyaJanata Party (Bjp)thebiggestparliamentaryman-ca'spresident, Barack Obama,wearingadark suitwithall 22dateforchange in3oyears.MrModihas concentratedmorelettersofhis namestitched overand over into itsgoldenpin-powerinhis own handsthan anyprimeministerin recentstripe.As he cracks down on groups like Greenpeace,somememory.Theproblem is that India needs a transformation-complainofhisauthoritarianstreak.The second mistakeis for Mr Modi to think that he aloneandthetaskistoomuchforaone-manband.canbring aboutchange.On the contrary,theonlywayforhimTheModibluestorealisehisaims is todraft inhelp.And it could comefromThere is no doubting Mr Modi's conviction thatIndia is aboutthreemain sources-India's states,other national politicianstoachievegreatness,andhemaywellberight.Withinagener-andthepowerofthemarket.ation,it will becometheplanet'smost populous nation.ItHehasmadeastartbydevolvingsomepowertostates.Thecould beoneof the world's three largest economies.And itideaistocreateamanufacturingboom (though thatwould,atcould wield more influence in internationalrelations than ata minimum,also require wider changes to the wayland isbought,labour hired and roads built).Asthey competein set-any timein its history. But, in his heart, the prime minister be-lieves that only one man is destined tolead India down thisting priorities for policy and spending,thego-getting statespath:Narendra Damodardas Modi.willbecomemodelsfortherest.GoodpolicywillberewardedMuchhas gonewell, though serendipity sharesthe credit.thankstoanationalgoods-and-servicestaxthatcreates acomHelped byoil prices,Mr Modi has presided overan improvingmonmarket-andhencecompetition-acrossIndia.MrModieconomy.Inflationisdown,interestratesaredropping,theru-sayshe wants thetax bynextApril,aspromised,though parlia-pee is stable,and fiscal and current-account deficits havementhas just delayedit. The sooner,the better.Unfortunately, national politics is a long way behind theshrunk.Official statisticians claim that India'sgrowth,at7.5%,outpaces China's-meaningthe country has the world's fast-states.MrModi cannotblithely assumehispowerwillgrowest-expandinglargeeconomy.Foreign directinvestmentisup.Theprimeminister'sofficecannotexpandtodoeverything.ItSo are theprime minister's visits abroad, where hecutsan im-istimetorelaunchhisgovernmentbybringing inoutsidetalpressivefigure.ThisnewspaperchosenottobackMrModi inent.Likethepreviousgovernment,heshouldgetinbrightpeo-plefrom theprivate sector-especially as the Bjpis shortofca-lastvear'selectionsbecauseofhisrecordonhandlingreligiousstrife.Though he fails to control the Hindu-extremist bulliespableleaders-to strengthen,say,thefinanceministryand thewhobackhim,wearehappythatourfearsofgravecommunalcorporate-affairsministry.InparliamentMrModicould someviolencehave sofarnotbeenrealised.timescompromisewiththeoppositionCongressparty,torushBut when it comes to reform, Mr Modi's record is under-throughthesalestax,say,ormakebuyingland simpler.whelming-as our special report in this issue explains.TheAlltogethernowpastyearsawauctionsofcoaldeposits.ThepastfewdayshaveLastly,he needs to use markets as agents of change.Mr Modibrought thetiniest of baby steps towards privatisation:eightstate-run hotels maybe sold off. Mr Modi points out that for-should lead a national campaign to ease the world's worst la-eigners maynow investmore in railways,insuranceand de-bourlaws.Perverserestrictionsondomestictradeinfarmpro-fence.He is cutting redtapetocreate afriendlier businesscli-duceshouldgo.Privatecompaniescouldcompetetomakethemate. Poorer Indians will increasingly get cash welfare, notrailways more effcient. Infrastructure must be built faster,cheap rations in kind: since April the world's biggest cash-whichrequiresabetterlaw onacquiringland.State-run bankstransferschemehasreplacedartificiallycheapcanistersofshouldnolongerbesubjecttopolitical meddling,butrecapi-cooking gas.Massive subsidies on diesel havebeen scrapped;talised and put in independent,ideally private, hands.Foreignwhoppingonesonparaffin shouldfollow.And byencourag-investors could raise standards in Indian universities.Acrossingpeopletoopen15omnewbankaccounts,linkedtoabio-thewoefullybadeducationsystemafocusisneeded onexcel-metricdatabaseof85ompeoplesofar,thegovernmentiscreat-lenceinteachingand standards-easingthewayformoreprivingastructuretoprovidebetterpovertyrelief.ateproviders.As welcomeas thisis,itsells India short.Mr ModiismakingMrModiactsas ifalotofsmall improvementsadduptotransformative gains.They don't. He is still thinking like thetwomistakes.Thefirstistothinkthattimeisonhissideandthat big unpopular decisions can wait, perhaps until he haschiefministerofGujarat,notanational leaderonamission tomake India rich and strong.If he is to transform his countrycontrol of the upperhouse as well as thelower one.That restson a delusion amongIndian leaders that theymust consoli-India'sone-man band needsanewtune

The Economist May 23rd 2015 9 AYEAR ago Narendra Modi came to office promising to bring India “good times”, by which he meant jobs, prosperity and international renown. His progress has been frustratingly slow. The problem is hardly a lack of opportunity. Voters gave hisBharatiya Janata Party(BJP) the biggestparliamentary man￾date for change in 30 years. Mr Modi has concentrated more power in his own hands than any prime minister in recent memory. The problem is that India needs a transformation— and the taskis too much for a one-man band. The Modi blues There is no doubting Mr Modi’s conviction that India is about to achieve greatness, and he may well be right. Within a gener￾ation, it will become the planet’s most populous nation. It could be one of the world’s three largest economies. And it could wield more influence in international relations than at any time in its history. But, in his heart, the prime minister be￾lieves that only one man is destined to lead India down this path: Narendra Damodardas Modi. Much has gone well, though serendipity shares the credit. Helped by oil prices, Mr Modi has presided over an improving economy. Inflation is down, interest rates are dropping, the ru￾pee is stable, and fiscal and current-account deficits have shrunk. Official statisticians claim that India’s growth, at 7.5%, outpaces China’s—meaning the country has the world’s fast￾est-expanding large economy. Foreign direct investment is up. So are the prime minister’s visits abroad, where he cuts an im￾pressive figure. This newspaper chose not to back Mr Modi in lastyear’selectionsbecause ofhisrecord on handling religious strife. Though he fails to control the Hindu-extremist bullies who backhim, we are happy that ourfears ofgrave communal violence have so far not been realised. But when it comes to reform, Mr Modi’s record is under￾whelming—as our special report in this issue explains. The pastyearsawauctionsofcoal deposits. The pastfew dayshave brought the tiniest of baby steps towards privatisation: eight state-run hotels may be sold off. Mr Modi points out that for￾eigners may now invest more in railways, insurance and de￾fence. He is cutting red tape to create a friendlier business cli￾mate. Poorer Indians will increasingly get cash welfare, not cheap rations in kind: since April the world’s biggest cash￾transfer scheme has replaced artificially cheap canisters of cooking gas. Massive subsidies on diesel have been scrapped; whopping ones on paraffin should follow. And by encourag￾ing people to open 150m new bank accounts, linked to a bio￾metricdatabase of850m people so far, the governmentiscreat￾ing a structure to provide better poverty relief. As welcome as this is, it sells India short. MrModi is making two mistakes. The first is to think that time is on his side and that big unpopular decisions can wait, perhaps until he has control of the upper house as well as the lower one. That rests on a delusion among Indian leaders that they must consoli￾date power first and reform later. In fact a brief period exists in which to get change going, early in the parliamentary term. Mr Modi already faces twinges ofpopular discontent. Surly voters drummed his party out in state elections in Delhi. Some dislike his attention to diplomacy overseas. This week he wrapped up a trip to China, Mongolia and South Korea, com￾pleting52 daysabroad in 18 countriesoverthe pastyear. Others are put off by his narcissism, embarrassed that he met Ameri￾ca’s president, Barack Obama, wearing a dark suit with all 22 letters of his name stitched over and over into its golden pin￾stripe. As he cracks down on groups like Greenpeace, some complain ofhis authoritarian streak. The second mistake is for Mr Modi to think that he alone can bring about change. On the contrary, the only way for him to realise his aims is to draft in help. And it could come from three main sources—India’s states, other national politicians and the power ofthe market. He has made a start by devolving some power to states. The idea is to create a manufacturing boom (though that would, at a minimum, also require wider changes to the way land is bought, labour hired and roads built). As they compete in set￾ting priorities for policy and spending, the go-getting states will become models forthe rest. Good policy will be rewarded thanks to a national goods-and-services tax that creates a com￾mon market—and hence competition—across India. Mr Modi sayshe wantsthe taxbynextApril, aspromised, though parlia￾ment has just delayed it. The sooner, the better. Unfortunately, national politics is a long way behind the states. Mr Modi cannot blithely assume his power will grow. The prime minister’s office cannot expand to do everything. It is time to relaunch his government by bringing in outside tal￾ent. Like the previous government, he should get in bright peo￾ple from the private sector—especially as the BJP is short of ca￾pable leaders—to strengthen, say, the finance ministry and the corporate-affairs ministry. In parliament Mr Modi could some￾times compromise with the opposition Congress party, to rush through the sales tax, say, or make buying land simpler. All together now Lastly, he needs to use markets as agents of change. Mr Modi should lead a national campaign to ease the world’s worst la￾bour laws. Perverse restrictions on domestic trade in farm pro￾duce should go. Private companies could compete to make the railways more efficient. Infrastructure must be built faster, which requires a betterlaw on acquiringland. State-run banks should no longer be subject to political meddling, but recapi￾talised and put in independent, ideally private, hands. Foreign investors could raise standards in Indian universities. Across the woefully bad education system a focus is needed on excel￾lence in teaching and standards—easing the way for more priv￾ate providers.   Mr Modi acts as if a lot of small improvements add up to transformative gains. They don’t. He is still thinking like the chief minister of Gujarat, not a national leader on a mission to make India rich and strong. If he is to transform his country, India’s one-man band needs a new tune. 7 India’s one-man band The country has a golden opportunity to transform itself. Narendra Modi risks missing it Leaders

10LeadersTheEconomistMay23rd2015ScottishnationalismHow to scotch itGivingScotlandfiscalautonomywouldimprovegovernanceandweakendemandsforindependenceVER three centuriesthe un-awardedtheparty95%of Scotland'sseatsforits50%oftheionbetweenScotlandandvote.It will not achieve such a wipeout in elections next yearEnglandhassurvivedskir-to the Scottish Parliament, which uses a proportional systemmishes,rivalries and,last year,a(andwhichtherestofBritaincouldlearnfrom).Evenso,thenail-biting referendum.But in-Nats'crushingvictoryisamandateforradicalchangecreasinglyScotland isits ownAnd change would be welcome.Britain is suffocatinglycountry.It will soon decide itscentralised,anddrainingpowerfromWestminsterwoulddoitown income-tax levelsandgood.Thereisnoreasonwhytheminimumwageshouldbebands,control half thereceipts from the vAr sales tax and setthe same in Lothianas in London,or whyScottishbusinessessomewelfarepayments.ThevotemaybeextendedinScottishshouldpaythesamerates asthoseinEngland.Scots seethem-electionsto16-year-olds(inEnglandthevotingageremains18).selves as moreleft-wingthantheEnglish;if theywantamoregenerous welfare state they should be able to establish one.Afteritsnear-cleansweepofScotlandonMay7th,theembold-But they should also have the responsibility topayfor it.ened ScottishNational Partyisoutfor more.ThesNp,whichruns Scotland's devolvedgovernmentand nowholds allbutThatiswhyMrCameronshouldgofurtherthanMsSturgeon'sthreeofthe Scottish seats in Westminster, has confrontedDa-immediatedemands,whichcombineautonomywithcontin-vidCameron,theprimeministeroftheshakyunion,with de-uedsubsidy.Abettersolutionwouldbetopressaheadtofullmands to set business taxes, the minimum wage and more as-fiscal autonomy.It could costScotlandaround8billion($12billion)a year.But it would befairerthantheexisting"Barnettpects of welfare policy. Scotland, already semi-detached,wouldbecomeanevenmoredistantneighbour(seepage46).formula",a crudemechanismwhichlavishesEnglish subsidyon Scotlandwhile shortchangingpoorerWales.And itwouldYe'lltakethehightaxandrlltakethelowtaxforceuponScotlandmoregrown-uppolitics.Decryingauster-Forthose,includingthis newspaper,whobelievethat Scotsity,as the snp has done so rousingly is easier when the booksandtheirfellowBritons arebetteroff together,itistemptingtoarebalanced inanother country.Canada's Parti Quebecoisresist suchdemands.Grantingconcessions to a partybent onshows how theappealofpopulistseparatistparties canfadeleadingitscountryintowhatlookslikealessprosperous,moreoncetheywinrealpower(seepage27).vulnerablefuture is risky.Somefearthat furtherdevolutionThere are three other reasons for straightening out Scot-would put Scotland onaone-wayroad toseverance.ForMrland's relations with the union. They are called EnglandCameron,recently returned with a thin majority,itis an unap-Wales and Northern Ireland,which are evermorefedup withpealing time to give ground to political rivals.Yet he shouldtheir cobbled-together, inconsistent constitutional settle-grantScotland thefreedomsthesNp'sleader,Nicola Sturgeon,ments.TheEnglish,inparticular,resentthefactthatall Mpsdemands-andmore.Greaterautonomywouldleadtobetter,voteonmattersthataffectonlyEngland,whichlacks aparlia-fairergovernment.Itmightevenscotchdemandsfordivorce.mentof its own.If it isto survive,theUnitedKingdomwillNotallwhovotedforthesNpwantindependence,anditshavetolookmorelikeafederation.GivingScotlandrealfree-support is flattered by thefirst-past-the-post system,whichdom-andwithitrealresponsibility-shouldbethefirststep.UkraineThe other battlegroundThe WestshoulddomuchmoretohelpUkraine's economy『NTHEearly1990s,asthecol-Some of this divergence is the bitter result of geopolitics.GDPperperson,$'oooIlapse of the Soviet Union re-Russia reconciled itself to Poland entering the West's orbitPurchasing-power paritymadeeasternEurope,twoecon-whenUkrainetriedtoshifttowardstheEuropeanUnionlastyear,Russiaseized Crimea-anditstillmeddlesinDonetsk (seeomies stood outfor theirsizePoland20and potential.Onewas Poland,page 42).Europe coulddangle theincentiveofjoiningtheEUinUkraine10with38mpeople;theotherUk-frontof Poland;full membershipforUkraineisremoteatbest.raine, a country of 52m. It wasBut reformist policyalsomattered.TheWest helped turnPo-1990952000051013notclearthenwhichwasdes-landintoaneconomicsuccessstory.Ifitnowwantstogivesuctinedforgreaterthings:Poland'sGDPperpersonwasnobiggercour to Ukraine-and to counter Russia's wrecking tactics-itthan Ukraine's,anditsheavilyindebtedeconomywasshrink-needstolearnfromthatearlierrescue.One lesson fromPoland is the need torestructuredebts.ingfast.Todaythecomparisonseemsludicrous.Ukraine'sThankstoa cutinPoland'sdebt-to-GDpratio,from83%in1990economyshrivelled byalmost18%year onyearinthefirstquarter.Poles are three times richer than Ukrainians.to 56% in 1993, debt-service obligations did not cripple thew

10 Leaders The Economist May 23rd 2015 1 OVER three centuries the un￾ion between Scotland and England has survived skir￾mishes, rivalries and, last year, a nail-biting referendum. But in￾creasingly, Scotland is its own country. It will soon decide its own income-tax levels and bands, control half the receipts from the VAT sales tax and set some welfare payments. The vote may be extended in Scottish elections to 16-year-olds (in England the voting age remains 18). Afterits near-clean sweep ofScotland on May 7th, the embold￾ened Scottish National Party is out for more. The SNP, which runs Scotland’s devolved government and now holds all but three of the Scottish seats in Westminster, has confronted Da￾vid Cameron, the prime minister of the shaky union, with de￾mands to set business taxes, the minimum wage and more as￾pects of welfare policy. Scotland, already semi-detached, would become an even more distant neighbour (see page 46). Ye’ll take the high tax and I’ll take the low tax For those, including this newspaper, who believe that Scots and their fellow Britons are better off together, it is tempting to resist such demands. Granting concessions to a party bent on leadingits country into what looks like a less prosperous, more vulnerable future is risky. Some fear that further devolution would put Scotland on a one-way road to severance. For Mr Cameron, recently returned with a thin majority, it is an unap￾pealing time to give ground to political rivals. Yet he should grant Scotland the freedoms the SNP’s leader, Nicola Sturgeon, demands—and more. Greater autonomy would lead to better, fairer government. It might even scotch demands for divorce. Not all who voted for the SNP want independence, and its support is flattered by the first-past-the-post system, which awarded the party 95% of Scotland’s seats for its 50% of the vote. It will not achieve such a wipeout in elections next year to the Scottish Parliament, which uses a proportional system (and which the rest of Britain could learn from). Even so, the Nats’ crushing victory is a mandate for radical change. And change would be welcome. Britain is suffocatingly centralised, and drainingpowerfrom Westminsterwould do it good. There is no reason why the minimum wage should be the same in Lothian as in London, or why Scottish businesses should pay the same rates as those in England. Scots see them￾selves as more left-wing than the English; if they want a more generous welfare state they should be able to establish one. But they should also have the responsibility to pay for it. That is why MrCameron should go furtherthan Ms Sturgeon’s immediate demands, which combine autonomy with contin￾ued subsidy. A better solution would be to press ahead to full fiscal autonomy. It could cost Scotland around £8 billion ($12 billion) a year. But it would be fairer than the existing “Barnett formula”, a crude mechanism which lavishes English subsidy on Scotland while shortchanging poorer Wales. And it would force upon Scotland more grown-up politics. Decrying auster￾ity, as the SNP has done so rousingly, is easier when the books are balanced in another country. Canada’s Parti Québécois shows how the appeal of populist separatist parties can fade once they win real power (see page 27). There are three other reasons for straightening out Scot￾land’s relations with the union. They are called England, Wales and Northern Ireland, which are ever more fed up with their cobbled-together, inconsistent constitutional settle￾ments. The English, in particular, resent the fact that all MPs vote on matters that affect only England, which lacks a parlia￾ment of its own. If it is to survive, the United Kingdom will have to look more like a federation. Giving Scotland real free￾dom—and with itreal responsibility—should be the first step. 7 Scottish nationalism How to scotch it Giving Scotland fiscal autonomy would improve governance and weaken demands forindependence I N THE early 1990s, as the col￾lapse of the Soviet Union re￾made eastern Europe, two econ￾omies stood out for their size and potential. One was Poland, with 38m people; the other Uk￾raine, a country of 52m. It was not clear then which was des￾tined forgreaterthings: Poland’sGDPperperson wasno bigger than Ukraine’s, and its heavily indebted economy was shrink￾ing fast. Today the comparison seems ludicrous. Ukraine’s economy shrivelled by almost 18% year on year in the first quarter. Poles are three times richer than Ukrainians. Some of this divergence is the bitter result of geopolitics. Russia reconciled itself to Poland entering the West’s orbit; when Ukraine tried to shift towards the European Union last year, Russia seized Crimea—and itstill meddlesin Donetsk (see page 42). Europe could dangle the incentive ofjoining the EUin front of Poland; full membership for Ukraine is remote at best. But reformist policy also mattered. The West helped turn Po￾land into an economicsuccessstory. Ifitnowwantsto give suc￾cour to Ukraine—and to counter Russia’s wrecking tactics—it needs to learn from that earlier rescue. One lesson from Poland is the need to restructure debts. Thanks to a cut in Poland’s debt-to-GDP ratio, from 83% in 1990 to 56% in 1993, debt-service obligations did not cripple the Ukraine The other battleground GDP per person, $’000 Purchasing-power parity 0 5 10 15 20 25 1990 95 2000 05 10 13 Ukraine Poland The West should do much more to help Ukraine’s economy