INSIDE: A 14-PAGE SPECIAL REPORT ON WOMEN AND WORK • Chevron 5 9 The world this week Asia 50 Governing China Th e Guangdong model Leaders 51 Movement in Myanmar 15 The euro zone Eye-rubbing Is t his rea lly t he end? 52 Afghanistan's economy 16 The supercommittee fails Investi ng or a-whoring? A downgrade fo r Congress 52 Pakistan's "memogate" 18 Spain's election As you were Big ma ndate, tig ht spot 53 Indonesia's reforms 18 Egypt's turmoil Unholy mudd le Egypt The generals must go: The generals must go leader, page 18. Gas masks and 54 Banyan 20 Shale gas fury in Tahrir Square, page 57 Justice tried and fo und Frack on wantin g On the cover 21 Policing internet piracy The single currency's collapse Accessories after t he fact may be Looming: leader, page Special report: Women 15. Spain's new government: and work Letters leader, page 18. Rajoy needs Closing the gap 22 On the euro, shipping, outside support, page 63. After page 54 toys, phrases, our WiLl Angela Merkel act? Page obituary 64. Denial and delusion in Middle East and Africa Brussels: Charlemagne, page 68. The euro crumbles, pages 57 Egypt's turmoil Briefing 81-83 . Concern about Chaos and its beneficiaries 33 International Criminal European banks: Buttonwood, 58 Tunisia Court page88 America's supercommittee Isla mists and secu La ri sts Cosy club or sword of By failing to agree on measures righteousness? 58 Libya's militias to limitthe deficit, the Hard to control The Economist online politicians have failed their 59 The Palestinians United States country: leader, page 16. Daily analysis and opi nion from Coming together at last? Fiscal policy's dangerous our 19 blogs, plus audio and video 39 The supercommittee 60 Human rights in Bahrain direction, page 39. Good, if content, debates and a daily chart Why it failed The king's bold move transitory, economic news, Econo mi st.com 1b logs 40 The economy page 40. The sword hanging 60 Congo's election E-mail: newsletters and Fina lly, some good news over t he Defence Department: That sinking feeling mobile edition 42 Gun control Lexington, page 46 Econo mi st.com I em ail 62 South Africa and secrecy Have firearm, can travel Don't blow t he whistle Print edition: avai lable online by 42 The Chicago River 7pm London time each Thursday Reflected glory Economist.comlprint Europe 43 Political fact-checking Audio edition: available online Fun at the FactFest 63 The Spanish election to download each Friday Manana belongs to 43 Drinking rules Economist.comlaudioedition Mariano Behind t he Zion curtain 64 Merkel and the euro 44 California's politics The new iron chancellor Help on t he way 64 France and automation 46 Lexin gton Driverless, workless Cutti ng defence Volume 401Number 8761 65 Turkey and human rights Home and abroad Piracy law Toug h pena lties for The Americas Fi rst published in Septembert843 piracy are needed, but a 66 Hungary's economy to take part in "a severe contest between 47 Politics in Brazil proposal in America's ;nt eWgence, w/1 ;cl• presses forward, and Pla net Orba n an unworthy. timfd ignoranceobstrucOng Cleaning th e pork facto ry Congress could hit law-abiding our progress. n 66 Poland's government 48 Mexico's drug war businesses: leader, page 21. Tusk sharpens up Editorial offices in London and also: Shifting sa nds The Stop Online Piracy Act, Atlanta , Beijing, Berlin, Brussels, Cai ro, 68 Charlemagne page 73 Chicago, Hong Ko ng, Jo hannesburg, Los Angeles, 49 Latin American Me•ico City, l~o scow, New Delhi, NewY ork, Pari s, The sinking euro integration San Francisco, Sao Paulo, Sing apore, Tokyo, Washington DC Peaks and troughs 49 Canada A surfeit of MPs ~~ Contents continues overleaf 87 Baltic banks Britain Red litas day 69 The economy 88 Buttonwood Autumn leaves falling Gloo m descends 70 Reviving manufacturing 90 Economics focus No land of giants House of horrors, part 2 71 The Leveson inquiry Celebs' revenge Sdence and technology 71 Thomas Cook At our operator's travails 91 Sdence in Japan Where rats and robots play 72 Bagehot GuangdongvChong~ng David Cameron, toxic Tory 92 Mars exploration Women and work Women have Competing models in Chinese How to Land a Mini on Mars made huge progress in the provinces, page 50 workplace, but theystillget 92 Climate change International lower pay and farfewertop Good news at last? 73 Online piracy jobs than men. Our special 93 AIDS Rights and wronged report asks why, after page 54 Get your act together, guys 74 Islam and comedy 93 Infantile anaemia Two mullahs go into a bar ... Blood simple Prind pal commercial offices: 25 St James's Street, London SWlA 1HG Tel: 020 7830 7000 Business Books and arts Boulevard des Tranchees 16 75 Shale gas in Europe and 95 New fiction from Japan 1206 Ge neva, Switzerland America Tel: 4122 566 2470 A black cat, two moons Two attitudes to fracking 750 3rd Avenue, 5th Floor, New York, NY1 0017 96 Cesar Chavez and the UFW 76 Bullets and business in Te~ 1212 541 0500 Trampling out the vintage Mexico 60/F Central Plaza Secrets of Jim Collins's A" green zone" for firms in 96 Artists and 18 Harbou r Road, Wanchai, Hong Kong success The rna na g em ent guru Jua rez photographers Tel: 852 2585 3888 who has stayed atthetop by Point and paint Other commercial offices: 78 Oubai's air show practising what he preaches: Chicago, Dubai, Frankfurt, los An geles, The travel boom boosts 97 Chinese export porcelain Paris, San Fra ncisco and Singapore Schum peter, page 80 Boei ng and Airbus Treasu re trove 78 E-commerce in China 98 Novels from Argentina The great lea p online The price of love Subscription service 79 Indian business For our latest subscription offe rs, visit Economtst.comjoffers Tata's magical Mistry tour Economic and finandal For su bscription service, please contact by telephone, fax, web or mail at the details 80 Schumpeter indicators provided below: The secrets of Ji m Colli ns's Statistics on 42 Telephone: 1800 456 6086 (from outside success economies, stockmarkets the US and Canada, 1314 447 8091) Facsimile: 1866 856 8075 (from outside and commodities prices, the US and Canada, 1 314 447 8065) plus a closer loo k at Web: Economistsubs.com Briefing pharmaceutical spending E-mail: OnlyAT&T's network lets your iPhone download 3~tfaster ~ on the iPhone 45. \;~ at&t FREE SHIPPING I 1.866.MOBILITY- ATT.COM/iPHONE- VISIT A STORE Claimb asel! onn ational averagei fltlone 4$ data speeds onA T&rs networlt vs.o tller US. networlts. ©20ll AT&T Intellectual Property. 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Progress is Everyone's Business is a trademark of Goldman Sachs. iPhone is a trademark of Apple Inc., registered in the U.S. and ocher countr ies. 9 Penalty to Brazil as the most recent "anyone- profits. Australia's upper Politics Brazil's environmental regu- but-Romney" favourite in the house is expected to pass the lator fined Chevron, an Ameri- party, surprised many by law early next year and the tax can oil company, $28m and calling for a partial amnesty should then come into force on suspended its drilling rights for illegal immigrants who July 1St. over an oil spill from an off- have lived in America for a shore well earlier this month. long time and paid taxes. Hard work ahead Chevron said it had stopped Spain's general election was the seepage within four days Brought to justice won by the opposition centre- and had complied with the A special UN-backed court in right People's Party, led by terms of its licence. Cambodia began to try the Mariano Rajoy. The ruling three most senior living lead- Socialists suffered their worst Gunmen apparently hired by ers of the Khmer Rouge on rout at the polls since the ranchers killed a chief from the genocide charges. The three return of democracy to Spain Kaiowa-Guarani Indian tribe men, who include Nuon Chea, in 1975. Mr Rajoy has an abso- Big protests erupted in Cairo in the Brazilian state of Mato "Brother Number Two", are the lute majority, but will not take and other cities, with calls for Grosso do Sul. only members of the regime office for a month. Although the generals who have run deemed fit to stand as defen- he promises austerity and Egypt since Hosni Mubarak's Enrique Peiia Nieto, who leads dants. At the trial's opening reform, nervous markets sent fall in February to hand over to opinion polls for Mexico's they justified their reign of Spanish bond yields higher. civilians. Some 40 people were presidential election next July, terror in the context of the killed by the security forces. was guaranteed the nomina- historical threat posed by In its latest efforts to solve the The ruling military council tion of the formerly ruling Vietnam, and denied the euro crisis the European Com- said that parliamentary elec- Institutional Revolutionary charges outright. mission set out options for tions due to begin on Novem- Party, after his only rival, Sena- Eurobonds and for more ber 28th would go ahead, and tor Manlio Fabio Beltrones, South Korea's national assem- intrusive control of national that presidential elections dropped out. bly ratified a free-trade agree- governments' budgets. But would be held by July. ment with the United States, Angela Merkel yet again reject- Haiti's president, Michel four years after the two coun- ed the idea of Eurobonds. A report by the Bahrain Martelly, announced that he tries first signed the deal and a Independent Commission of would setup a civilian com- month after it was approved Hungary turned to the IMF for Inquiry said the authorities mittee to study whether or not by Congress. Despite a project- a precautionary credit line. had used "excessive force" in a to revive his country's army, ed boost to the Korean econ- The government of Viktor crackdown earlier this year which was disbanded in 1995. omy and, the prospect of Orban had previously ruled against pro-democracy prot- closer ties with America at a out any such course. esters, most of them from the What a surprise time of worsening relations Shia majority. King Hamad The "supercommittee" on with North Korea, the agree- Elio di Rupo, the politician al-Khalifa, a Sunni, said that America's budget deficit ad- ment was strongly resisted by charged with forming a Bel- officials who had abused their mitted defeat in Congress. The the opposition. One assembly gian government, submitted power would be sacked. panel was set up in August to member disrupted the vote by his resignation after failing to thrash out a bipartisan agree- letting off a tear-gas canister. strike a deal on next year's Saif al-Islam Qaddafi, the son ment to reduce the deficit. Its budget. Belgium has been and heir of Muammar Qad- failure to do so triggers auto- Pakistan's ambassador to the without a new government dafi, was caught in southern matic spending cuts of $L2 United States was forced to since an election in June 2010. Libya. So, separately, was the trillion, to start in 2013. But resign, amid allegations that he late dictator's intelligence arguments have already begun was behind a memo pledging chief, Abdullah al-Senussi. about how "automatic" the to eject senior soldiers close to Both are wanted by the cuts should be, with some the Tali ban in Pakistan, in International Criminal Court, Republicans pressing for the exchange for American help in which has apparently agreed Pentagon to be spared. preventing any potential coup. that they might face trial in Libya. Aung San Suu Kyi's National League for Democracy party Yemen's president, Ali said it would participate in Abdullah Saleh, at last signed Myanmar's forthcoming an agreement brokered by the by-elections. Last year the Gulf Co-operation Council, party boycotted Myanmar's saying that he would stand first general election in two Vladimir Putin, who plans to down and hand power to his decades. return as Russia's president vice-president. next year, got a surprise when Julia Gillard, the prime min- a crowd booed as he entered a South African MPS passed a ister of Australia, scored a mixed martial arts ring to controversial media secrecy political victory when the congratulate the winner of a bill, which the government The latest Republican presi- lower house of parliament fight. Officials, who tightly says is needed to protect state dential candidates' debate passed the controversial Min- control Mr Putin's crafted secrets and safeguard national focused on national security. erals Resource Rent Tax, which public appearances, at first security. Critics say it will curb Newt Gingrich, who has vault- will subject mining companies suggested that the boos were freedom of speech. ed into the lead in some polls to a higher levy on annual aimed at the fighters. ~~ 10 T e wor t 1s wee T e Econom1st Novem er 26t 2011 the 2.5% that was released in an Groupon's shares took a crease the risk of heart attacks Business official first estimate. Mean- battering, falling well below and strokes. The drug com- while, data showed unem- the price of $2o a share the pany is to pay a $322m fine and The crisis in the euro zone ployment falling in 36 states in internet company set at its a further $628m to conclude intensified as banks struggled October, and rising in just five. initial public offering earlier civil charges. It agreed to plead to obtain credit in the markets, Nevada's unemployment rate, this month. It floated only a guilty to a misdemeanour forcing more of them to bor- at13-4%, is still the highest. small portion of its stock, related to the marketing of row from the European Cen- making it more vulnerable to Vioxx to doctors. Merck has tral Bank. Bond yields main- price volatility, but questions already paid out $4.9 billion to tained near-unsustainable I Indian rupee against the linger about Group on's com- settle lawsuits from patients. levels on Italian and Spanish dollar petitiveness in the crowded Inverted scale government debt and crept up 44 market for discounting online. It emerged thatJ ames Mur- for other countries, notably 46 doch has stepped down from Belgium and France. In anoth- 48 Nokia Siemens Networks the boards of the subsidiaries er worrying sign Germany 50 said it would cut 17,000 jobs. that operate News Corpo- managed to sell only 6o% of 52 The network-equipment ration's British newspapers. ten-year Bunds it issued at an L---~----~--~54 maker is restructuring its busi- Mr Murdoch, who faces ques- auction, though the low yield Sep Oct Nov ness to focus more on broad- tions from a parliamentary 2011 of1 .98% may have been a band infrastructure. committee about his previous Soufte: Thomson Re-uters factor in turning off investors. testimony on phone hacking, The Indian rupee fell to a Gilead Sciences, a drugs remains chairman of News Exam time record low against the dollar. company best known for its International, News Corp's The Federal Reserve issued its The currency has depreciated treatments for HIV, said it British newspaper division. final rules for a second round rapidly in the past three would buy Pharmasset, of stress tests at America's months, amid doubts about which develops drugs to com- No fun in the sun biggest banks. The banks must the strength of India's econ- bat viral infections, in an $11 Thomas Cook, a travel com- assess whether they can main- omy and a slump in foreign billion deal. Pharmasset has pany, saw its share price col- tain a Tier-1 capital ratio of 5% investment. no medicines on the market, lapse after it sought to negoti- under a hypothetical eco- but is working on new pro- ate a second round of debt nomic scenario that includes There's gas in them there hills ducts for people with hepatitis financing within a month and America's unemployment rate A consortium led by Kohl berg c that can be taken as a single delayed the publication of its reachingt3%. The six biggest Kravis Roberts agreed to buy shot, rather than the several annual results. The company, banks will also have to dem- most of Samson Investment, a daily medications that are which can trace its British roots onstrate that they can with- privately held oil and gas currently required. to1841. when its eponymous stand a severe global financial exploration firm, for $7.2 bil- founder transported people to shock similar to the scale of lion. It is one of the biggest Merck reached a settlement temperance rallies, is strug- that in 2008, but with the leveraged buy-outs since the with the American govern- gling at the cheaper end of the addition of a financial melt- start of the financial crisis. ment over Vioxx, its block- European holiday market. down in Europe. Samson owns drilling rights in buster painkiller that was several shale-gas formations, pulled from the market in 2004 Other economic data and news The Federal Deposit Insurance including in North Dakota. because it was found to in- can be found on pages 104·105 Corporation reported that American banks turned a collective net profit of $35 billion in the third quarter, a MY,BR!JTHERS IN !HE AA.A'P Lf.AGUE rise of 48% from the same .ACCUSE:!) ME quarter in 2010. The banks OVOEfR' -VRI£O1\LCETINOTO increased their income by putting less money aside to cover bad loans, rather than expanding lending. The Tokyo Stock Exchange said it would merge with the Osaka Securities Exchange, which focuses on derivatives, in January 2013, creating the world's third-biggest bourse. Sceptics wonder if the new company will be an effective international player among the other big exchanges. The American economy didn't perform quite as well in the third quarter as had been thought. GDP grew by an annual rate of 2%, rather than