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