The Economist • • • America's next CEO? Mitt Romney's assets and liabilities Introductory rate of 0% for 21 months from date of account opening on purchases and balance transfers. After the introductory period ends, the standard purchase APR will be applied to unpaid promotional balances. The standard variable APR for purchases and cash advances is 16.99%. Minimum interest charge- $0.50. Fee for foreign purchases- 3% of the U.S. dollar amount of each purchase made outside the U.S. Cash advance fee- 5% of cash advance amount. $10 minimum. Balance transfer fee- 3% of balance transfer amount. $5 minimum. © 2012 Citigroup Inc. Citibank, N.A. Member FDIC. Citi, Citi with Arc Design and Citi Simplicity are registered service marks of Citigroup Inc. 3 6 The world this week Asia 39 India's UID scheme Reform by numbers Leaders 40 Malaysian politics 9 Mitt Romney The end of Sodomy 2.0 America's next CEO? 41 Chinese air pollution 10 India's identity scheme Clearing the air? The magic number 41 Abductions in Sri Lanka 11 Executive pay Murky business Bosses under fire 42 Australia's aborigines 11 Natural disasters Occupied land India How an ID scheme could The cost of catastrophes help India's poorest people- 43 Banyan 12 Scotland's referendum and serve as a model for other Letthem eat yellowcake Clarity, please countries leader, page 10. On the cover Opposition to the scheme, Mitt Romney Looks Like Middle East and Africa page 39 Letters winning the Republican 44 Nigeria 14 On oil, the Republicans, nomination. His party could As preading insurgency the East India Company, do worse: Leader, page 9. suicide, Belgian beer, the 45 South Africa He is stiLL an enigma to rich Disappointment Republican voters-and 46 Israeli politics the rest, pages 24-26. South Shaking the kaleidoscope Carolina beckons, page 27. Briefing His career says a Lot about 46 Egypt's religions 24 Mitt Romney how American business Nervous Christians Towards the coronation has changed: Schumpeter, 46 Rwandan history page68 Shifting the blame United States 47 Tunisia 27 New Hampshire's primary Ideology v practicality The Economist online Mitt Romney marches on Executive pay Britain is a case 47 Syria and Russia study in how politicians miss Daily analysis and opinion from 28 The recovery and the Wait and sea the point when they try to our 19 blogs, plus audio and video election "fix" executive pay: leader, content, debates and a daily chart That 2004 feeling page 11. Bosses' pay levels Economist.comfblogs Europe 29 Guantanamo are driven by globalisation . E-mail: newsletters and No way out 49 Europe's economies Moves to link pay and Af alse dawn? mobile edition 29 Harsh Laws performance need to Economist.comfemail Another one in the net 50 Germany and the euro recognise this, page 55 Unhappy new year Print edition: available online by 30 Rebalancing America's 7pm London time each Thursday forces 50 French tourism Economist.comfprint Downgrading Europe Boney-park Audio edition: available online 32 Lexington 51 Greek woes to download each Friday Obama and Iran The Mediterranean blues Economist.comfaudioedition 52 Albanians in Greece Heading home again The Americas 53 Charlemagne 35 Brazil's trade policy Denmark and the EU Seeking protection 36 Iran and Latin America Volume 402 Number 8767 Brothers in arms? Britain 37 Colombia's former 54 Scotland's referendum First published in September1843 Scotland's independence The to take part in "a severe contest between para militaries If at first you don't referendum should ask one intelligence, which presses forward, and Criminals with attitude succeed an unworthy, timid ignorance obstructing question: in or out? Leader, our progress. " 37 Lima's metro 55 Executive pay page 12. Wrangling over the Editorial offices in London and also: The train leaves at last Money for nothing? terms of the vote, page 54 Atlanta, Beiji ng, Berli n, Brussels, Cairo, 56 Terrorists and historians Chicago, Hong Ko ng, Jo han nesburg, Los Angeles, Mexico City, Moscow, New Delhi , New York, Paris, Deathly archive Sa n Francisco, Sao Pau lo, Si ngapore, Tokyo, Washington DC 56 No-frills hotels Room without a view 57 Bagehot Edonomics ~~ Contents continues overleaf 4 Contents The Economist January 14th 2012 International Books and arts 58 Video and human rights 79 The haj on show Visibility before all Journey of faith 59 Baby names 80 El sistema in Venezuela Thanks, mum Music man 81 Prosecuting al-Qaeda At ricky business Briefing 60 Natural disasters Counting the cost of Business books quarterly calamities 82 Setting a price on the Kodak and Fuji Why is Kodak Next week future at death's door while Fujifilm , We publish a spedal report The mathematics of its old rival, is thriving? Business on state capitalism. The markets Page 63 63 Technological change crisis of Western liberal 83 Wall Street analysis The last Kodak moment? capitalism has coindded Mike Mayo's memoir with the rise of a powerful 66 Carrefour 83 Global marketing new form of state capitalism Bread, cheese, new boss? Local heroes in emerging markets, says 66 Golden parachutes 84 World changers Adrian Wooldridge Rip-cord economics Headbanging 67 Brands in China 84 Job interviews Fakes lose favour Pri ndpal commercial offices: Application 25 StJames's St reet, London SW1A 1HG 68 Schumpeter Tel: 020 7830 1000 Romney the revolutionary Boulevard des Tranchees 16 92 Economic and finandal 1206 Geneva, Switzerland indicators Tel: 41 22 566 2470 Finance and economics Statistics on 42 750 3rd Avenu e, 5th Floo r, New York, NY 10017 Natural disasters The rising 69 China's property market economies, plus a closer Tel: 1212 5410500 cost of catastrophes, and how Marriages and mergers look at our Big Mac index 60/ F Central Plaza to limitthedamagetheydo: 70 Buttonwood 18 Harbour Road, Wanchai, Hong Kong leader, page 11; briefing, The euro's descent Tel: 852 2585 3888 Obituary pages 60-62 71 European bank capital Other commercial offices: 94 Ronald Searle Chicago, Dubai , Frankfurt, Los Angeles, By hook or by crook How to be Toppin Art Paris, San Francisco and Singapore 71 Reviewing the crisis The Lo down 72 After Hildebrand Subscription service Damage control For our lat est subscription offers, visit Economist.comj offers 72 Taxing golf For subscription service, please contact by Putters aflutter telephone, fax , web or mail at the details provided below: 73 Japan's trade balance Telephone: 1800 456 6086 (from outside the US and Canada, 1314 447 8091) Seeing red Facsimile: 1866 856 8075 (from outside 74 Free exchange the US and Canada, 1314 447 8065) Web: Economistsubs.com The politics of economics E-mail: I I D D D 0 CKGSB ~ . IT mi ~ ~ CHEUNG ICONG GRADUATt SCHOOl OF BUSINESS WWW. CKGSB . EDU.CN Join us at CKGSB and Know What's Next. 6 Suu Kyi, whose National aimed at Shia Muslims. One Warning signs Politics League for Democracy party killed 48 on a pilgrimage to the General Ilker Bas bug, a former boycotted the 2010 general holy city of Karbala. The at- chief of staff in Turkey, was election, will contest a seat tacks raised fears of a new arrested in Istanbul on suspi- from a constituency near wave of sectarian violence cion of coup-plotting. A few Yangon. The number of seats following the withdrawal of days later Turkish prosecutors being contested in the by- all American troops at the end opened an investigation into elections will not pose a threat of last year. statements made by Kemal to the government's domi- Kilicdaroglu, leader of the nance of parliament. As tension rose between Iran main opposition party. Amid and Western governments growing concern over authori- Walking it trying to stop its nuclear pro- tarianism in Turkey, the Coun- As expected, Mitt Romney gramme, an Iranian scientist cil of Europe, a human-rights won the New Hampshire who worked at a uranium- watchdog, said the country's primary by a huge margin, enrichment plant was killed judicial system failed to safe- A row broke out between leaving the other Republican by a car-bomb in Tehran. It was guard the rights of defendants. Pakistan's military leaders presidential candidates in his the fourth such attack since and its government after wake. Rick Santor um, who did 2010. Iran blamed foreign Mario Monti, Italy's prime Yo usaf Raza Gilani, the prime well in Iowa, placed a lowly governments, but America minister, said that his govern- minister, criticised the army fifth. Jon Huntsman, who had condemned the bomb attack, ment's reform efforts needed chief of staff for participating pinned all his hopes on a good and said it "had absolutely to be matched by measures in a public judicial inquiry. The showing, came third. nothing to do" with it. from the European Union and military responded with a Germany, such as a lowering strongly worded statement William Daley stepped down of interest rates. After meeting warning of "serious ram- as Barack Obama's chief of Mr Monti Angela Merkel hint- ifications". Mr Gilani also staff, after just a year in the job. ed that Germany might be sacked his defence secretary. Mr Daley's appointment was prepared to boost the euro- Meanwhile, America resumed broadly welcomed at the time zone bail-out fund. drone missile strikes on Pal<i- as a positive move that would stani territory, killing four help repair the White House's At the first of what will be militants in the tribal area. The strained relations with busi- many meetings between the deployment of drones was ness (Mr Daley is a former pair this year, Angela Merkel suspended after air strikes commerce secretary), but he and Nicolas Sarkozy said that mistakenly killed 24 Pakistani struggled amid last year's the strategy of forcing auster- soldiers in November. rancour over the budget. Mr ity on euro-zone countries Obama's new chief of staff is needed to be complemented Afghanistan's president, Jacob Lew, his budget director. Iran's president, Mahmoud by measures to boost growth. Hamid Karzai, demanded that Ahmadinejad, visited Venezu- But they provided little detail. the Tali ban declare an official Living in violent times ela, Nicaragua, Cuba and Mr Sarkozy called again for an cease fire before peace talks can Against the backdrop of an Ecuador in his fifth Latin EU agreement to impose a tax begin in Qatar, where the increase in sectarian strife, American trip since 2005. On on financial transactions, Tali ban have agreed to open a strikes and disturbances the eve of his arrival the U n- which is opposed by Britain. political office. Eleven NATO spread across Nigeria as ited States expelled Venezue- troops have been killed in people protested against a cut la's consul in Miami, who was Afghanistan since the start of in fuel subsidies that, since the alleged in a television pro- the year. Meanwhile, the Pen- new year, has doubled the cost gramme to have joined Iranian tagon said it would investigate of petrol. diplomats and Mexican hack- an incident, taped on video, of ers in a cyber-plot against American troops apparently South Africa's ruling African America. Venezuela called the urinating on the corpses of National Congress celebrated allegations "lies". Tali ban fighters. its 10oth anniversary with a jamboree on January 9th in Daniel Ortega was sworn in A court acquitted Anwar Ibra- Bloemfontein, where it was for a third term of doubtful him, the leader of Malaysia's founded. constitutionality as Nicara- main opposition party, of gua's president in a ceremony sodomy charges (homosexual- In his third televised address attended by other Central A war of words erupted be- ity is still illegal in Malaysia). since protests began in Syria in American presidents but tween David Cameron, the The trial had dragged on for March, President Bashar Assad boycotted by the country's British prime minister, and two years and was seen by blamed the unrest on foreign opposition. Alex Salmond (above), the first many as an attempt by the powers trying to de stabilise minister of Scotland. Mr government to discredit Mr the country and vowed to Contrary to their initial diag- Cameron said that Mr Salm- Anwar, who was cleared by crush "terrorists", whom he nosis, doctors who performed ond's plan to hold a referen- the supreme court of similar blamed for two recent suicide- an operation on Argentina's dum on Scottish indepen- charges in a previous case. bombs in Damascus. president, Cristina Fernandez, dence should be held sooner to remove her thyroid gland rather than later, and that it Myanmar set the date of April Over 100 people were killed in said that she did not have should contain a simple in-or- 1st for by-elections in the lower a spate of bombings across cancer. She is expected to out question. Mr Salmond told house of parliament. Aung San Iraq. Many of the attacks were return to work soon. him to butt out. ~~ The Economist January 14th 2012 The world this week 7 quarter of the liquidity provid- China's trade surplus in 2011 whistle-blowing chief exec- Business ed recently by the European fell to $158 billion, the smallest utive who was sacked for his Central Bank in the form of it has been since 2005. efforts, is to sue the company. Philipp Hildebrand resigned as cheap loans. chairman of the Swiss More Rolls-Royce cars were Samsung said operating profit National Bank amid a politi- Looking better sold in China last year than for the last quarter of 2011 cal furore over currency trades anywhere else, according to would top $4.5 billion, the carried out by his wife last US employment BMW, which owns the luxury South Korean company's summer, weeks before the Annual change, m carmaker. Rolls-Royce sold a biggest quarterly profit to date, central bank set a ceiling for record 3,538 vehicles world- boosted in large part by its the Swiss franc, and questions wide, the most since 1978. popular Galaxy smartphones. over whether he had prior Bentley, Aston Martin, Lam- One casualty of Samsung's knowledge of the transactions. borghini and other upmarket success appears to be HTC; the It is thought that Mr Hilde- carmakers have also reported Taiwanese smartphone-maker brand's wife made a sub- a surge in sales in China. reported its first slide in profit stantial profit from the franc's for two years. 2007 08 09 10 11 subsequent depreciation, but Computing wares soft Source: Bureau of labour Statistics Mr Hilde brand insists that she Infosys spooked investors by Bristol-Myers Squibb said it had not been aware of the The unemployment rate in lowering its outlook for the would buy Inhibitex for $2.5 SNB's impending intervention America fell again, to 8.5% in year. The Indian IT-services billion, the second big take- in the currency market. December. Last year American giant, and an emerging-market over in under two months of a employers createdL6mjobs, bellwether, blamed uncertain- drugs company specialising in Nomura's ambition to turn the most since 2006 but a long ty in Europe, its second-biggest treatments for hepatitis C. itself into a global player in way short of the 8.7m that market. Global spending on IT investment banking suffered a were lost during the recession is expected to grow by 3.7% in Not so sweet setback when its most senior and after. 2012, according to Gartner, a Hostess Brands, the maker of foreign banker stepped down. consultancy, almost half the Twinkies and assorted other Jesse Bhattaljoined the Japa- Germany's G DP grew by 3% rate in 201L But in western goodies, filed for bankruptcy nese broker after helping to last year, according to a first Europe the market is set to protection. The baking com- negotiate the deal through estimate. But the economy decline by 0.7% this year. pany cited the high costs asso- which it bought Lehman may have contracted slightly ciated with the pension and Brothers' Asian businesses in the fourth quarter. Olympus commenced pro- medical benefits it provides to during the 2008 crash. Nomu- ceedings for damages against its workers, 83% of whom are ra has incurred hefty costs Chinese imports rose by 11.8% current and former directors unionised. It wants the unions from incorporating the busi- in December, compared with whom it accuses of neglecting voluntarily to accept "dramatic ness. Its share price was the the same month in 2010, the their duties in an accounting change" to the agreements, or second-worst performer on slowest pace of growth in two scandal. The Japanese com- else it will ask for court permis- the Nikkei index last year, after years (though demand for pany's biggest claim is against sion to reject the deals. Tokyo Electric Power. copper, iron ore and other Tsuyoshi Kikukawa, who commodities remained strong resigned as chairman in Octo- Other economic data and news Royal Bank of Scotland, in China's industrial factories). ber. Michael Woodward, the can be found on pages 92-93 which is still owned by the British taxpayer, confirmed it was cutting an extra 3,500 jobs in investment banking. HE: IS A L~-TIME:. OProNENT Of' Fitch said it would probably youR CUR~ 6UANTI\NAMO downgrade its A • credit rating POLICY on Italy's sovereign debt, and warned that the country "is the front-line" of the euro-zone crisis. The yields on Italian ten- year government bonds this week remained around 7%, which is thought to be unsus- tainable over the long term. Italy hopes to sell some €440 billion ($560 billion) in bonds and Treasury bills this year. The share price of UniCredit, Italy's biggest bank, fell further as it pushed ahead with a huge rights issue. European regu- lators want UniCredit to raise an additional €8 billion in capital by June. Italian banks have soaked up around a Introducing AT&T to1 e than3G. Limited 4G LTE availability in select markets. Deployment ongoing. 4G LTE device and data plan required. Claim compares 4G LTE download speeds to industry average 3G download Rethink Possible"' speeds. LTE is a trademark of ETSI. Learn more about 4G LTE at att.com/network. ATT.COM/NETWORK ©2012 AT&T Intellectual Property. Service provided by AT&T Mobility. All rights reserved. AT&T and the AT&T logo are trademarks of AT&T Intellectual Property. All other marks contained herein are the property of their respective owners. 9 America's next CEO? Mitt Romney looks like winning the Republican nomination. The party could do worse HE Republican primaries sence of capitalism itself. He says he created a netwo,ooo jobs Tare meant to last six months, during his time at Bain. That figure is impossible to prove, but allowing all so states to have he could do more to argue that the benefits outweigh the costs. their say in the nomination of a His task has not been helped by disgraceful attacks from fel- candidate to take on Barack low-Republicans on corporate restructuring. Obama in November. Amazing- Third, Mr Romney seems sure-footed. It is hard to think of a ly, they may be all over only single misstep in this campaign. He may be wooden, but no days after they started. scandal has ever attached to him. His family life is impeccably On January 1oth, a week after his victory in conservative monogamous and progenitive. Those who have worked close- Iowa, Mitt Romney trounced his six opponents in liberal New ly with him tend to admire him. On both the economic and the Hampshire, winning nearly twice the share of his nearest rival foreign-policy sides, he has already put together impressive (see page 27). The polls predict a victory for him in South Caro- and above all sensibly moderate teams. lina on January 21st, and another in Florida on the 31st. Even if the race staggers on beyond that, he has raised as much money The debit side of the ledger and built a bigger organisation than the rest of the Republican A useful list, to be sure: but can it outweigh the negatives? Mr field combined. Barring an upset, Mr Romney is likely to win Romney's pragmatism has an inconvenient flip side: no one is the nomination. The polls suggest that, should he do so, he has quite sure where he stands. The Republican base does not a real chance of ousting a president who has squandered think he is reliable on such things as gay rights and abortion. much of his standing with the political centre. That will not matter so much to independents (who will prob- But he has a lot of work to do. At the moment many Ameri- ably also accept that any Republican has to say a few mad cans find him a bit of an enigma: a flip-flapper on some big is- things to win a nomination). But people have to trust a presi- sues, wooden in public, and a committed member of one of dent on the main issues, and, despite publishing a long eco- the world's odder religions. None of that is entirely unfair, but nomic manifesto, Mr Romney remains vague over how a lot of it is exaggerated and incomplete (see pages 24-26). At his best, it is to be accomplished. Mr Romney should be able to offer America a competent cen- It is not at all clear how he would reform America's ruin- tre-right alternative to Mr Obama (and drag the latter back to- ously expensive health-care and pensions systems. His views wards the ignored middle). But he must do a better job than he on what he wants to do about America's 12m illegal immi- so far has of capitalising on his advantages and mitigating his grants are also unsettlingly gnomic. And where he has been weaknesses. clear, he has sometimes been wrong: his insistence that, on day one of his presidency, he will brand China as a currency Paint it grey manipulator represents dangerous pandering to populists. His Start with the advantages. The most important fact about Mr pledge to cut federal spending to no more than 20% of G DP, a Romney is that he is a non-ideological man who did some- sop to his party's fiscal extremists, would also be dangerous if thing that America needs a lot more of. In 2002 he was elected applied as quickly as he implies. to govern Massachusetts, normally a Democratic stronghold. Mr Romney will have other problems in wooing the elec- He passed a version of health-care reform that is at once his torate. He would be the richest candidate ever to win a big- proudest achievement and his biggest liability. Back then a sys- party nomination and he reeks of privilege. His father was a tem based on obliging everyone to buy private health insur- governor as well, and he himself studied law at Harvard. On ance was a conservative idea, and Mr Romney did a good job the other hand, Mr Obama is a millionaire several times over, of working with a hostile legislature to get it passed. (Today, his can give a fair impression of having come from the planet Vul- party viscerally opposes Mr Obama's health reforms, which can, and also studied law at Harvard. Mr Romney's lack of cha- are closely modelled on Mr Romney's; such are the twists of risma is a problem; but perhaps America wants fewer soaring politics.) He also turned round Massachusetts's finances, just speeches and more pragmatic restructuring plans. as he had earlier righted the Salt Lake City Winter Olympics. Mr Romney's last difficulty is one that should not be a pro- Mr Romney needs to make these successes count for more blem at all. He is a Mormon and, despite Mormons' protesta- than they have so far. Once the primaries are over, and Ameri- tions to the contrary, a third of Americans do not consider ca's independents rather than the Republican Party faithful be- them to be Christians. There is not much Mr Romney can do come the electorate to win over, he may be able to. about this. He could explain the Mormons' extraordinary mis- Second, Mr Romney has something that the president and sionary work, but he can hardly risk saying that it is not really his Republican rivals sorely lack: business experience. For 25 any more incredible that God communicated His plans to man years he made himself and the management consultancies in upstate New York in 1820 than He did in Palestine in OAD. BCG and Bain a lot of money by making companies more effi- We recall, however, that America was for decades "not ready" cient which, yes, sometimes means firing people, but also for a Catholic president, or for a black one. Eventually, Ameri- drives economic growth (see page 68). So far, Mr Romney has cans thought better of those attitudes. Prejudice would be a sil- done a poor job of defending himself against attacks which ly reason for the Republicans to reject a man who offers their are really aimed at the creative destruction which is the es- best chance of beating Mr 0 bama . • 10 Leaders The Economist January 14th 2012 India's identity scheme The magic number A huge identity scheme promises to help India's poor-and to serve as a model for other countries NDIA'S economy might be who steal billions should more easily be bypassed or caught. I thriving, but many of its peo- That is just the start. Armed with the system, India will be ple are not. This week Manmo- able to rethink the nature of its welfare state, cutting back on han Singh, the prime minister, benefits in kind and market-distorting subsidies, and turning said his compatriots should be to cash transfers paid directly into the bank accounts of the ashamed that over two-fifths of neediest. Hundreds of millions of the poor must open bank their children are underfed. accounts, which is all to the good, because it will bind them They should be outraged, too, at into the modern economy. Care must be taken so mothers the infant mortality, illiteracy, lack of clean drinking water and rather than feckless fathers control funds for their children. But countless other curses that afflict the poor. most poor people, including anyone who wants to move Poverty has many causes, and no simple cure. But one mas- around, will be better off with cash welfare paid in full. Vouch- sive problem in India is that few poor people can prove who ers for medical or education spending could follow. they are. They have no passport, no driving licence, no proof Companies-and their customers-stand to gain from the of address. They live in villages where multitudes share the system too. Mr Nilekani talks of India stealing a march on oth- same name. Their lack of an identity excludes them from the er countries if firms have an easy, secure way of identifying modern economy. They cannot open bank accounts, and no their customers. Banks will be more likely to lend money to one would be so foolish as to lend them money. people they can trace. Mobile-phone firms will extend credit. The government offers them all kinds of welfare, but be- Insurers will offer lower rates, because they will know more cause they lack an identity, they struggle to lay hands on what about the person they are covering. Medical records will be- they have been promised. The state spends a fortune on subsi- come portable, as will school records. Ordinary Indians will dised grain for the hungry, but an estimated two-thirds of it is find it easier to buy and sell things online, as ordinary Chinese stolen or adulterated by middlemen. The government pays for already do. Just as America's Global Positioning System, de- an $8 billion-a-year make-work scheme for the rural poor, but signed for aiming missiles, is now used by everyone for civil- much of the cash ends up in the capacious pockets of officials ian navigation and online maps, so might um become the in- who invent imaginary "ghost workers". frastructure for India's commercial services. Suppose those thieving middlemen were obliged to deliver grain, not to poor people in general but to named individuals They've got your number who could confirm receipt by scanning their fingerprints? And India's scheme holds three lessons for other countries. One is suppose those ghost workers had to undergo an iris scan be- that designing such a scheme as a platform for government fore being paid? If poor Indians each had an identity number services, not security, keeps the costs down and boosts the tied to unique biometric markers, it would be much harder for benefits. Another is to use the private sector. From the start, Mr the powerful to rob them. Sceptics will scoff that the Indian Nilekani harnessed the genius of Indians abroad, including a government is far too incompetent to implement such a man who helped the New York Stock Exchange crunch its scheme. But the sceptics are wrong. numbers and one of the brains behind Web MD, an American health IT firm. Both public and private actors (mostly tech ID-ing the benefits firms that enroll participants and process data) are paid strictly This month India's unique identity (um) scheme will enroll by results. The cost of enrolling each person is a little over 100 its 200 millionth member, having had almost none only a year rupees ($2). Many other poor countries could afford that. ago (see page 39). By the end of this year, says Nandan Nile- And the third is that, alas, even a brilliant idea has enemies. kani, a former software mogul who runs the project, the tally India's stubborn home minister, P. Chidambaram, is now could stand at 400m, a third of all Indians. The scheme is vo- blocking a cabinet decision to extend the um's mandate, luntary, but the poor are visibly enthusiastic about it. Long which is needed for the roll-out to continue. Parliamentarians lines wait patiently in the heat to have their fingerprints and and activists have raised worries over India's lack of strong irises scanned and entered into what has swiftly become the privacy and data-protection laws; they also complain about world's largest biometric database. the weak legal basis for the scheme. For the poor, having a secure online identity alters their re- These complaints have some validity, but not enough to de- lationship with the modern world. No more queueing for rail the scheme. For instance, India plainly needs better data- hours in a distant town and bribing officials with money you protection laws, but even if the existing rules remained un- don't have to obtain paperwork that won't be recognised if changed, the threat to liberty would be dwarfed by the gains to you move to another state looking for work. A pilot project just welfare: to people who live ten to a room, concerns about pri- begun in]harkhand, an eastern state, will link the new identi- vacy sound outlandish. Some of the resistance is principled, ties to individuals' bank accounts. Those to whom the govern- but much comes from the people who do well out of to day's ment owes money will soon be able to receive it electronically, filthy system. Indian politics hinge on patronage-the doling either at a bank or at a village shop. Ghost labourers staffing out of opportunities to rob one's countrymen. um would public-works schemes, and any among India's 2om govern- make this harder. That is why it faces such fierce opposition, ment employees, should turn into thin air. The middlemen and why it could transform India. •