FOR three days in early September Hurricane Irma ground through the eastern Caribbean like a bulldozer made out of wind and rain. Tropical breezes became 300kph (185mph) blasts, turning “tin roofs into flying razor blades”, as Maarten van Aalst of the Red Cross put it. Placid seas reared up in giant waves and rainwater coursed through streets. Even when the sun eventually came out the nightmare did not end. Shortages of food and water sparked looting on some islands. Survivors were grateful that fewer than 50 people, at last count, died in the Caribbean, but Irma’s fury left thousands homeless in the 13 island countries and territories in its path, including Cuba. Entire settlements were wiped off the map.
Most islanders want above all to return to normal life as fast as possible, which for many means reopening the hotels, bars, restaurants, surfing schools and the like that are the region’s economic lifeblood. Authorities on St Barthélemy, a territory that…Continue reading
If it looks like rubbish collection…
FOR residents of Macau, a former Portuguese colony that is now an autonomous region of China, Typhoon Hato was striking not just for the damage it did, but for the help that came in its wake. After the storm pounded the territory in late August, Chinese troops emerged from their barracks to help with relief work. It was the army’s first deployment on the streets of the territory since the end of Portuguese rule in 1999. Strikingly, the soldiers’ presence was cheered.
In nearby Hong Kong, to which Macau is due to be linked by a long bridge next year, Chinese troops have not been called out to help the local authorities since Britain handed the territory back to China in 1997. Suspicions of the Chinese army run deep. Annual commemorations of its crushing of the Tiananmen Square protests in Beijing in 1989 attract thousands.
Not so in Macau, where critics of China have been far less vocal, and opposition to…Continue reading
The strongest earthquake in a century struck the coast of Mexico on September 7th, killing at least 96 people. Most died in the southern state of Oaxaca. In the town of Juchitán the quake destroyed the hospital and made a third of the houses uninhabitable. The death toll was far lower than in the earthquake off the coast of Michoacán in 1985, in which at least 10,000 people died, many of them in Mexico City. That caused political tremors, discrediting the then-president, Miguel de la Madrid, of the Institutional Revolutionary Party (PRI), who seemed paralysed by the disaster. Mexico’s current president, Enrique Peña Nieto, who also belongs to PRI, is hardly more popular. But in the hope of avoiding his predecessor’s mistakes, he visited Juchitán on September 8th.
ASTANA in Kazakhstan is one of the world’s most remote capitals, surrounded by thousands of kilometres of empty steppe. This summer Astana attempted to launch itself onto the global stage by hosting the World Expo, which closed on September 10th and underwhelmed many attendees. But there are other ways to have an impact. On the city’s north side, away from the Expo’s exhibits, a series of diesel trains, each pulling dozens of containers, roll through the old railway station. Most are heading from China to Europe. Last year over 500,000 tonnes of freight went by train between the two, up from next to nothing before 2013. Airlines and shipping firms are watching things closely.
The trains rumbling through Astana result from a Chinese initiative, in tandem with countries like Kazakhstan, to build a “New Silk Road” through Central Asia. The earlier overland routes were once the conduits for most trade between Europe and China and India; they faded into irrelevance…Continue reading
Fruit of a global supply chain
BROWSING websites that list sperm donors is weirdly similar to online dating. “Sanford is the total package,” begins one online ad, describing his strong jawline and piercing blue eyes. With a degree in finance and a “charming demeanour”, he is more than a pretty face. You can listen to a voice recording from Sanford himself. If all that wins you over, you can have his baby without ever having to go on a date. For $635, Seattle Sperm Bank (SSB) will post you a vial of his frozen swimmers.
The fact that the main customers for many sperm banks are now single women explains the marketing technique. “They tend to be highly educated, impatient and picky,” says Ole Schou, founder of Cryos International, the world’s largest sperm bank, based in Denmark’s second-biggest city, Aarhus. Its website is designed to resemble Match.com, a dating site, because “finding a donor should be as close to finding a natural partner as…Continue reading
Bringing rivers of the liquefied stuff
WHEN it comes to liquefied natural gas (LNG), the supermajors have supersized appetites. The likes of Royal Dutch Shell, ExxonMobil and BP make discoveries described as “elephants”; their cost overruns alone can run into the tens of billions of dollars; and projects take the best part of a decade to complete. For years, the industry has demanded fixed, long-term contracts from their customers to justify the size of these megaprojects.
The producers also have pretty big problems. They are in the midst of a vast expansion in Australia and elsewhere just as the shale revolution and the start of American LNG exports has brought an unexpected burst of gas onto markets, clobbering prices for the foreseeable future and forcing producers into concessions. Demand in rich countries such as Japan and much of western Europe appears to be in long-term decline.
At least one big customer, China, is making life easier….Continue reading
COMPANIES’ legal structures are usually mind-numbing fare. But occasionally it is worth pinching yourself and paying attention. Take “variable interest entities” (VIEs), a kind of corporate architecture used mainly by China’s tech firms, including two superstars, Alibaba and Tencent. They go largely unremarked, but VIEs have become incredibly important. Investors outside China have about $1trn invested in firms that use them.
Few legal experts think that VIEs are about to collapse, but few expect them to endure, either. One sizeable investor admits loving Chinese tech firms’ businesses while feeling queasy about their legal structures. Like scientists appalled by their monstrous creations, even the lawyers who designed VIEs worry. They are “China’s version of too-big-to-fail”, says one. As well as being spooky, VIEs are another instance of how China’s weak property rights hurt its citizens.
What are VIEs? Over 100 companies use them. Since the 1990s private firms have sought to break free of China’s isolated legal and financial systems. Many have done so by forming holding companies in tax havens and listing their shares in New York or Hong Kong. The problem is that they are then usually categorised as “foreign firms” under Chinese rules. That in turn prohibits them from owning assets in some politically sensitive sectors, most…Continue reading
DESPITE four months of protests, more than 120 deaths and mounting diplomatic pressure, Nicolás Maduro has got away with it. Venezuela’s president has imposed a rigged constituent assembly to replace the elected, opposition-controlled parliament. He is ruling as a dictator, jailing or harassing scores of opponents. This poses a stark question: what, if anything, can be done to restore democracy?
In the short term, the answer is not much. The protests have stopped. Mr Maduro has the opposition where he wants it: split as to whether or not to participate in an overdue election for regional governors next month, organised by the same tame electoral authority that shamelessly inflated the turnout for the constituent assembly vote from under 4m to 8.5m. For now, the main threats to Mr Maduro’s regime come from elsewhere—from outsiders and from its acute shortage of money.
The United States has responded to the slide to dictatorship by ordering sanctions against 21 Venezuelan…Continue reading
ON SEPTEMBER 12th, before it could reckon how much damage Hurricane Irma had caused, Turks and Caicos got some heartening news. Within a fortnight the tiny Caribbean territory would get $13.6m to pay for disaster relief. Days earlier, Antigua and Barbuda, St Kitts and Nevis and Anguilla were pledged $15.6m. The sum, a substantial 1% of their combined GDP, won’t come from foreign do-gooders. It is a reward for home-grown prudence.
Like 13 other members of the Caribbean Community (Caricom) and Nicaragua, the four had been paying into the Caribbean Catastrophe Risk Insurance Facility (CCRIF). Created in 2007, it has so far doled out $69m to places battered by storms, floods and earthquakes. Unused funds are retained as reserves. Besides its own resources, CCRIF can draw on around $140m underwritten annually by reinsurers.
Spreading risk across Caricom and beyond—CCRIF is open to associate members such as Anguilla and, since 2015, to Central American…Continue reading
IN RECENT days government employees across China, from postal officials in the north-east to tax auditors in the south-west, have been corralled into watching state television. The Communist Party often orders bureaucrats to study propaganda. This time, however, the mandatory viewing has deviated from the usual themes of domestic politics and economic development. Instead, it has focused on China’s emergence as a global power, and the role of the president, Xi Jinping, in bringing this about.
In late August and early September the state broadcaster aired six 45-minute programmes on this topic at peak viewing hours. The Chinese title could be rendered as “Great-Power Diplomacy”, but some state media prefer to call it “Major-Country Diplomacy”. That sounds a little more modest. Describing China’s growing global clout has long been a problem for propagandists. In 2003 they seemed to have settled on the term “peaceful rise”, only to abandon it a few months later in favour of…Continue reading