SPECIAL * HOLIDAY x DOUBLEXISSUE a Th ibution of hope Barack Houdini Obama The rights and wrongs of hacktivism Iceland's lessons for Europe DECEMBER 187H-215T 2010 Economist.com Richard Holbrooke, diplomatic hurricane The joy of growing old Smee COTULLA RM L-Laa-(e Mme MOTTA CXL M Colt mol alco) o1cy Living in an Indian village » An excess of choice » Rise of the image men Magnificent Magyar microcars » The disposable PhD » Medieval warfare The Boxer Uprising » Barbecue culture » A Moghul emperor's diary Ascension Island » Mexican Okies « Nollywood conquers Africa How the suit evolved » An elegy for the pubSKIPPER’S WATCH Re eR aOR oe a een LR a Se Ce CD bs nifrfect synchronisation with the start of any regatta, The 44 mm Yacht-Master I, Ce eRe Coe ec Rc eeROLEX Erne art-t)LOUIS VUITTONa 13 4 16 33 Thejoyofgrowingold, 16 orwhy life begins at 46 39 America’s Mexican 18 migrant workers 20 4s 53 Barbecue and culture in the United States 46 59 Lifein an Indian 49 village 50 55 56 56 ‘75 What the Boxer Uprising means to madern China = 67 68 68 70 70 R 80 The diary of Babur, the first Moghul emperor The world this year Leaders Globalisation The redistribution of hope Government debt Behold 2011, the year of sovereign shocks ‘climate change A sortof progress WikiLeaks ‘The rights and wronas of hacttivism Putinisation in eastern Europe The tasks undone Letters ‘On America and Europe, WikiLeaks, GM crops, students, Sarah Patin, happiness, the number 11, United States Long-term tunemployment. Inthe bleak midwinter Health reform Terminal or curable? The warin Afghanistan Still pouring Lexington Barack Houdini Obama The Americas {Immigration in Canada Asmallerweleome mat ELSalvador's president So far, so good Mexico's drug war Falling kingpins, rising violence Asia India and china Hardening attitudes China's civil service Aspiring mandarins War crimes in Bangladesh Answering for history Karachi's ethnicfeuds Mob battles Boat people in Australia Asylum or death? Banyan China's problems abroad Middle East and Africa 91 Somalia's insurgency Sending the boys hame 92 The media press in southern Africa U-turn on the long walk to freedam 93 Iran's foreign minister Thank you and goodbye 93 Driving in Iraq stilhazardous 85 How Nollywood is colonising Africa Europe 95 Silvio Berlusconi survives Clinging on 96 Hungarian politics Hungry for power 99 Terrorism in Sweden Aclose shave 99 Christopher Cviic Best of the Balkans 100 Kosove's future Organs of state 100 Montenegro and the European Union ‘Another Balkan candidate 101 The magnificent Magyar microcars Britain Reshaping local ‘government. Careful what you wish for 417 118 Extremismin Luton what went wrong 105 An elegy for the 119 Rising unemployment rit ut and inflation cee Bah humus! 119 Cake and culture Season's eatings co 120 Bagehot Caristmas with Father Whip International 121 Climate-change diplomacy Back from the brink Extradition and WikiLeaks Courting trouble 122 The Stuxnet worm Yet to turn 110 The terors of medieval 322 4114 AChinese Grand Tour of Europe >» Contents continues overleaf129 Italian television The glory of Berlusconi 130 Internet start-ups Anather bubble? 130 RioTintoand China Digging with the dragon 132 Corporate law Offshoring your lawyer 123 Does the modernworld «134 Schumpeter offer too much choice? Why do firms exist? 126 Public relations: rise oF ee) 4141 Lessons from Iceland Coming in from the cold 142 Buttonwood Rising bond yields 145 The world’s biggest ‘economy When will China avertake ‘America? , 145 The Madoff fraud 135 The evolution ofthe suit atte sae Sty 146 Economics focus Poverty and terror 153 Monitoring forests Seeing the world forthe trees 154 Peat bogs and ctimate arnt change 149 How manuscripts Wet, wet, wet ‘illuminate adarkage 154 Culturomies Reading by numbers 155 Volcanic eruptions Guided by the lightning 156 Isitworth doing a PhD? sland Business Finance and economics ‘Science and technology Books and arts 163 The future of English ‘re its days asa lingua franca numbered? 164 Men and their mistresses Fancy women have their say 164 American financial history Borrowed time 465 Neapolitan banking history Ducats for Caravaggio 165 Pakistani contemporary art Breath ofviolence Obituary 166 Richard Holbrooke Bombs for peace 4185 Economic and financial indicators Statistics on 42 economies, plus loser looks at remittance casts and tax revenue PEFC coccrmetiyne fn Principal commercial ofces: Erste suet Loon ake “asez0 an 700 Fa a0 798 2988/9 Boulevard de Trance Bos Cener Serna Toeat22566 2610 Foe 2245967 75024 en lor Nena NYO ec saientenco fata atone. opera ‘Bhar oad chal ona Kong Toca 2585 888 Fo 82802738 omerconmertat tie: ‘age owe Fane sages, Pars Sn rancicosn Sapo Subscription service “epee: 180068608 (i ase Uotsancrscr Sine a7 cot) fits 08 96295 on ie ‘ieubesi crete stuseay one) Wie Kawmtaecam nats romehdporonoalcon Eneaitaeaere Stina owsicora sk Sabscrition for year (511505) Unt Ses ssa ues asian en ass eco sue The Economist online Daily analysis and opinion from ‘ur blogs, plus audioand video content, debates and daily chart Feonomistcm/blogs E-mail newsletters and mobile edition conomist.com/ematt Print eition:availableontine by ‘pm London time each Thursday Economist.com print Audio edition: available online ‘ta download each Friday conamist.com/audioedition Volume 397 Nambor O72‘ | “Don’t drink the water.” Ee rd ut boundaries? Premier HSBC «> The world’s local bankTIFFANY & Co,The world this year High levels of public debt among countries in the euro zone turned intoa full-blown crisis for the currency block. As markets began tolose conf- dencein the ability of afew countries to finance their debt, and rapidly pushed up their borrowing costs,the European, Union and the rs eventually resolved o bail out Greece and, ater, Ireland. Investors also fretted over Spain and Portugal, Measures to tackle budget deficits were met with protests, especially in Greece, which endured strikes and rots. In Franceim people demonstrated against pension reformsin asingle day. AsEurope tightened its fiseal belt, America passed more stimulus measures. Barack ‘Obama also signed into law the most sweeping changes to ‘America’s financial-regu- latory system since the1930s and health-care reform act that was hailed by many as America's most significant piece af social legislation since the3960s. Conservatives chal- lenged theactin the courts Unease about deficits and the “jobless recovery” were factors behind the increasing clout of tea-partiersin America. With their support the Republicans scoreda sensational win ina special election for Ted Kenne- dy’sformer Senate seatin ‘Massachusetts, November's mid-term elections saw the Democrats swept from power inthe Fiouse by the biggest sswingtothe Republicans in decades. Congress ended the year onitslowest-ever Gallup approval rating=13%. In China the main worry was of an overheating economy. ‘The central bank unexpectedly raised interest rates for the frst time in three years amid con- cerns about inflation, Official, trade statistics showed China had overtaken Germany as the world’s biggest exporter. ‘Tensions overcurrency poli- ey were at the forefront during summits of the G20 and iM. Google hada spat with China ‘over censorship and a cyber attackon its website there, ‘causing to redirect its Chi nese internet searches through Hong Kong. Separately, Google, Facebook and others promised to do more o protect privacy afier an outery about their handling of users’ personal data. The year of tiving dangerously ‘An earthquake in Haiti wasa humanitarian disaster, killing atleast230,000 people and leavingim homeless. The ‘quake devastated Port-au- Prince and eft swathes of the country’s fragile infrastructure in ruins. A deadly outbreak of choleraiaterinthe year and political unrest compounded themisery, Drifting ash clouds emanating from a voleano in Iceland led tothe closure of European air space for several days, causing thebiggest disruptionto worldwide air travel since Septembernth 2001. American combat operations endedin frag, seven years, after the start of the war. Around 50,000 troopstemain in asupportrole until the end of 20n.[raq continued tobe troubled by violence and suicide-bombs after the Amer icans departed, Anelection ‘was held in March, though a new government didn’t begin to emerge until November, ‘The warin Afghanistan rum- bled on. Coalition troops ‘mounted theirbiggest offer sive against the Taliban since 2001, The deaths of civiliansin targeted missile attacks aimed, atthe Taliban andal-Qaeda ‘caused rows. General Stanley ‘McChrystal was sacked as, commander of coalition forces after amagazine publishedan interview in which he dis paraged thehandling of the war by America’s civilian leadership. General David Petraeus took charge. Pakistan endured another year of severe terrorist attacks, starting on January ast when a suicide-bomberkilled200 people ata volleyball match. InJuly, the Pakistani Taliban claimed responsibility for huge blastsata Sufi shrine in Lahoreand at amarket in the tribal area, Riotingin Karachi after the assassination of a politician killed scores. Relent- less flooding from exception- ally heavy monsoon rains affected om people, adding to the country’s woes. Among the year’s other deadlt est terrorattacks were co- ordinated bombings at two crowded bars in Kampala, the ‘Ugandan capital. The Shabab, Somali Islamist militia, claimed responsibility. The heatis on A spate of terrorist assaults in Russia, including suicide- bombing on the Moscow metro, killed scores of people. Chechen separatists were blamed. The hottest summer in Russian history resulted in hundreds of wildfires, caus- ing a public health erisis in Moscow when smoke envel: ped the city. Aspoof broadcast in Georgia claiming that Russiahadin- vaded the country caused panic. The bulletin, using ‘imagery from the 2008 Russia Georgia war, prompted people to flee Tbilisi the capital After months of cajoling, Israel and the Palestinians sat around he table for direct talks, hough the negotiations soon broke down over the building of Jewish settlements oon the West Bank. The Ameri- carIsraci relationship be- came somewhatstrained. Israeli intelligence was saidto bebehind the assassination of aseniorHamasmilitary leader, who was killed ata hotel in Dubai. A diplom: row ensued when it emerged that the assassins had tavelled under thestolen identities of European and Australian citizens. There was another international ruekus when Israeli commandos shot dead nine people ona Turkish ship with humanitarian supplies bound for Gaza. ‘The world cheered when all33, ‘men trapped underground for 669 daysata mine in Chile were brought safely to the surface But mining accidents in China, Russia, West Virginia, New Zealand and Turkey each killed dozens of workers. Anclection in Britain saw Labour booted outof power alter years. The Conserva tives emerged as the biggest party but without an overall majority. Afera few tense days of talks, the Conserva- tives formed a coalition the firstin Britain since thes9405) withthe Liberal Democrats, ‘who came tied at the pols. ‘The new government led by David Cameron, embarked on aradical programme of spend: ingeuts Joyful and triumphant Inotherbig elections, Dilma Rousseff won the presidency in Brazil, the first woman to do so.Julia Gillard became Australia's first female prime ministerafier ousting Kevin Rudd;she kept the ob aftera subsequent election. For the firsttime in 50 years Chile elected a conservative prest