Where car ownership is highest

LUXEMBOURG'S roads are jammed with 647 cars for every 1,000 people, the highest ownership rate in the world. The tiny country is rich, which probably accounts for its motor-mania. Car ownership is also high in wealthy countries with remote rural populations, such as Iceland and New Zealand. Surprisingly, America, home of the motor vehicle, has fewer cars per person than either Australia or Canada.

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Scandal hits Satyam, one of India’s biggest software companies

SATYAM means “truth” in Sanskrit, an ancient Indian language. On January 7th Satyam Computer Services, one of the country’s biggest software and services companies, revealed some alarming truths about Indian capitalism, even in its spiffiest industry. The company’s founder and chairman, B. Ramalinga Raju, confessed to a $1.47 billion fraud on its balance sheet, which he and his brother, Satyam’s managing director, had disguised from the company’s board, senior managers and auditors for several years. “It was like riding a tiger, not knowing how to get off without being eaten,” Mr Raju wrote.

The tiger carried Mr Raju deep into the woods. Quarter after quarter, he inflated Satyam’s profits, even as operations expanded and costs grew. The company, which is listed on both the New York Stock Exchange (NYSE) and the Bombay Stock Exchange, now claims to have 53,000 employees, and customers in 66 countries, including 185 companies in the Fortune 500. In its books for the third quarter it reported 50.4 billion rupees ($1.03 billion) of cash and 3.76 billion of earned interest that do not in fact exist. It also understated its liabilities by 12.3 billion rupees and overstated the money it is owed by 4.9 billion. ...

The Bank of England cuts interest rates to 1.5%, an all-time low

THE decision made history. On Thursday January 8th the Bank of England cut the base rate from 2% to 1.5%, the lowest since the central bank was founded in 1694. The Bank of England’s mission then was to provide war finance. Its task now is to fight a recession that looks increasingly likely to be the worst since the second world war.

The bank’s latest move means that the base rate has now fallen by an extraordinary 3.5 percentage points since the start of October (see chart). It followed a clutch of closely watched business surveys of purchasing managers that painted a dismal picture of the economy in December. Manufacturing was mired in the deepest downturn since the survey started in 1992. Construction activity plumbed new depths. And activity in private services stayed close to its record low in November. ...

Pipelines, missiles and maybe something worse

GAZA, rather than gas, is likely to be top of the new American administration’s to-do list. If the ex-communist world gets any early attention, it will be in search of Russian help over Iran and in the Middle East, rather than the pressing business of Europe’s energy and military security. If Barack Obama’s top foreign-policy officials pay even a nanosecond of attention to eastern Europe in the first few months of their time in office, it will be to bemoan locals’ inability to deal with their own problems.

Imagine the difference a single-minded and effective push on Nabucco a few years back would have made. If that pipeline, bringing Caspian and Central Asian gas to Europe via Turkey, was seriously underway—perhaps fed by a trans-Caspian gas pipeline, perhaps just with Azeri gas—then the effects of the current Russian-Ukrainian energy spat would have been to accelerate an existing project to early completion, rather than to highlight the shambles. ...

Where paradise and purgatory meet

THIS is a diary of a week in paradise. Not heavenly paradise, or Eden, but a third usage of the term: tropical paradise. Today, I am in Lamu on the north coast of Kenya. This narrow, blistering archipelago has been on the posh end of the hippy trail since the 1970s. For centuries before that, a mongrel mix arrived on the trade winds: Omanis, Yemenis, Persians, Indians, Malays, Comorians, Somalis, Africans from the length of the Swahili coast, Portuguese, Germans, and British. Some added to the rich Sufi traditions of Lamu’s mosques; all played a part in fashioning an urban culture alternately pious and decadent, which even now has no need for cars and is only incidentally electrified. ...

Chinese government censors are scouring the internet for signs of dissent

Increasingly worried about a sickly economy sowing social unrest, the Chinese government is tightening state control over the media. Its main aim appears to be to smother dissemination of politically sensitive discussions and information on the Internet.

On January 5th authorities notified 19 popular domestic and foreign Internet companies—including Sina, Tencent, Baidu and Google—that a failure to expunge pornography from their mainland websites could lead to a shutdown. Though officials touted the move as a moral imperative, Chinese citizens often use the same websites to vent their grievances at the government on innumerable blogs and postings. In a highly publicised incident in 2007, for example, the existence of illegal brick factories employing kidnapped children came to light when desperate parents took their search to cyberspace on Tianya, which operates Internet forums. Hence, the call for stricter self-censorship of any content can easily gag all controversial topics online. ...

How the financial crisis has affected the rich

EVEN the rich suffer in a financial crisis. Over a third of American millionaire households said they lost at least 30% of their net worth since September, according to a new report by Spectrem Group, a financial consultancy. Property, mutual funds, shares and annuities took the biggest knocks. Unsurprisingly, financial advisors are under more scrutiny, with satisfaction levels falling from 60% earlier in the year to 40%. A majority of the wealthy say they may not be able to support their lifestyles and nearly 20% will delay retirement.

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Exasperated with Pakistan, India tries international-diplomacy for now

EVER since the attack on Mumbai in November that left 174 people dead, India has thundered against Pakistan’s complicity in the atrocity. But this has produced neither a full Pakistani admission of responsibility nor the requested surrender of terrorist suspects to India. This week India stepped up its efforts. It released a dossier of evidence to Pakistan and other governments. And it sharpened its accusation against Pakistan’s government. More than simply ignoring or conniving at preparations for the attack, argued India’s prime minister, Manmohan Singh, some of its agencies must have been actively involved in an operation of such sophistication.

The dossier includes the interrogation of the one surviving attacker, intercepted communications, and evidence of their weaponry. Pakistan had insisted it had seen no evidence linking the government—or indeed any Pakistani citizens—to an attack it blamed on “stateless actors”. And it suggests that India might be planning military reprisals. India has denied this, but Pakistan has moved troops from the Afghan border in readiness. Indian diplomats say the talk of a military threat from India is simply a smokescreen to divert attention from Pakistan’s failure to tackle the real issue: its nurturing of terrorists. ...

Hardy political perennials in Thailand and Bangladesh

THE swearing-in this week of Sheikh Hasina Wajed as Bangladesh’s prime minister has brought national celebration. There is much to cheer: the return of democratic rule after two years of army-installed technocracy; a successful election, largely free of the violence, intimidation and massive vote-buying that marked its predecessors; the toppling of the unpopular regime of Khaleda Zia’s Bangladesh Nationalist Party (BNP), which preceded the army’s interregnum; and the rout of Mrs Zia’s Islamist allies, and hence, it is hoped, of the political wings of Islamist extremism.

Even the army may be making the best of it. A victory for Mrs Zia might have been more unwelcome to them. The BNP suffered badly under the caretaker government’s anti-corruption drive. Mrs Zia’s own son had left prison a literally broken man—his back badly damaged by whatever happened to him in custody. So she might have been more likely to press for vengeance. ...

Leon Panetta and the state of American intelligence

OUTSIDERS have typically had a hard time running the CIA. So why has Barack Obama chosen 70-year-old Leon Panetta for the top job? Mr Panetta was Bill Clinton’s chief of staff and he ran the budget bureaucracy, but he has no background in spying. Improving the state of America’s intelligence services should be a priority, yet Mr Obama is installing a man whose experience lies in politics and management, not spookery.

A partial answer may be that anybody—even an insider—would have a difficult task heading the agency today. Morale is low after the organisation has lurched from failure to scandal in the past few years. Under George Tenet, the long-time director who was beloved by his staff, the CIA failed to spot the September 11th attacks in the works. Then came intelligence mistakes over weapons of mass destruction and Iraq, followed by controversy over the use of torture and harsh interrogation techniques, such as the “waterboarding” of suspected terrorists (making the detainee believe he is suffocating or drowning). ...

In 2008 America's stockmarkets suffered their second-worst year since 1825

INVESTORS are told that the value of their shares may go down as well as up. Rarely, however, do they plummet as far as they did in 2008. The total return of the S&P 500 index fell by nearly 40% last year, the second-worst performance by America's stockmarket since 1825, according to calculations by Value Square, a Belgian asset-management firm. Comparisons to the Depression are clear: only in 1931 and 1937 were there similarly abysmal losses. The firm looked at various predecessors of the S&P 500 from 1923 onwards, and for earlier years took data from a working paper by Yale Management School on the returns of companies listed on the New York Stock Exchange. Since 1825, 129 years saw rising returns, whereas 55 suffered falls—four of them in this century.

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The Blagojevich saga drags on, embarrassing the Democrats just when they should be celebrating

THE 111th Congress is sworn in on Tuesday January 6th. The 435 representatives will take their places with a minimum of fuss, but the more august chamber, the Senate, is bogged down in the sort of machinations that a writer of political fiction would scarcely dare to dream up.

The main row, concerning the post of junior senator from Illinois, is turning into a great embarrassment for the Democrats just as they ought to be celebrating their assumption of a decisive lock on the Senate. The party may end up with 58 or even 59 of the 100 seats, tantalisingly close to an unblockable supermajority of 60. It gains piquancy from the fact that it is the victory of Barack Obama that made the whole mess possible. ...

Cuba's Raul Castro has made overtures to Barack Obama

In the wake of the 50th anniversary of the Cuban Revolution, President Raul Castro has made overtures to the US president-elect, Barack Obama. Seizing on Mr Obama’s statements on the campaign trail that he would be willing to meet with Cuban officials and consider loosening sanctions, Mr Castro has repeated a recent offer to meet on “neutral ground”. However, though Mr Obama is likely to ease some of the restrictions on US-Cuba economic and family ties, a more substantial revamping of the US’s trade and investment embargo on the island is not likely in the short term.

Cuba's dealings with the US have been on hold during the transition between the outgoing presidency of George W Bush and Mr Obama's inauguration on January 20th. In one of his regular press "Reflections", Fidel Castro—who, though ailing, remains an intellectual force influencing Cuba’s political life—welcomed Mr Obama's election, describing him as "decent". Yet the former president’s language has been cautious. Raul, who took over from his brother in July 2006 and was officially named president in February 2008, has also suggested that expectations of a change in US policy may be too high. ...

The downturn poses new challenges for philanthropy

AMONG the more difficult things to forecast for 2009 is what will happen to giving. On the one hand, the turmoil in financial markets has reduced the assets of many prominent givers, both foundations and individuals. Warren Buffett’s company, Berkshire Hathaway, has lost around one-third of its value in the past year. Sir Tom Hunter, a Scottish entrepreneur who had become one of the leaders in a resurgence of British philanthropy by pledging to give away a billion pounds over his lifetime, has lost a lot of money, and says his foundation will be “scaling back what we are doing this year”. The collapse of Bernie Madoff’s Ponzi scheme has dealt a devastating blow to Jewish philanthropy in particular, as so many wealthy Jews invested their money with him, hitting several charities very hard, including prominent non-profits such as Human Rights Watch.

On the other hand, giving has proven remarkably recession proof, at least in America. During the Great Depression, giving rose. Over the past 40 years there have been several recessions, but just one year in which total giving has fallen in America: 1987, the year of the “Black Monday” stockmarket crash. ...

Russia has cut supplies of gas to Ukraine, but a deal will soon be reached

Russian gas supplies to south-eastern Europe have been disrupted by the now customary dispute over pricing between Ukraine and Russia which has led the latter to cut supplies to the Ukrainian domestic market. The two sides were briefly close to an agreement but are now far apart and blaming each other for the cuts. In theory Ukraine has sufficient reserves to hold out for 2-3 months and so the transit problems could rumble on; in practice, the two sides’ mutual dependence argues in favour of an agreement. Yet this depends on Ukraine’s squabbling leaders putting their differences aside and taking responsibility for an arrangement that will see import and domestic prices rise still higher.

In the first two days following the cessation of Russian gas supplies to the Ukrainian market on January 1st, there were no reports of a fall in deliveries of Russian gas to European countries via Ukraine. Since January 3, however, a number have been affected: Poland, the Czech Republic, Bulgaria, Romania, Turkey, Croatia and Greece. Poland has been the most severely effected, with supplies via Ukraine down by 11% compared with a month earlier. ...

Countries with the most, and fewest, doctors

UNSURPRISINGLY access to health care is closely tied to wealth. African countries have the fewest doctors per head of population, with Malawi the worst off. Beyond Africa, Bhutan is particularly short of doctors. Turkmenistan and Cuba have the most doctors to go around, more even than rich countries. Other former communist countries such as Belarus and Georgia are also well endowed with members of the medical profession.

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