TUESDAY, JULY 2, 2013 THE GLOBAL EDITION OF THE NEW YORK TIMES GLOBAL. NYTIMES.

COM
FOR SUBSCRIPTION INFORMATION, CALL:
00800 44 48 78 27
or e-mail us at subs@iht.com
. . . .
Algeria Din 175 Ivory Coast CFA 2.500
Andorra 3.00 Morocco Dh 22
Antilles 3.00 Senegal CFA 2.500
Cameroon CFA 2.500 Tunisia Din 3.900
Gabon CFA 2.500 Reunion 3.50
NEWSSTAND PRICES
France 3.00
:HIKKLD=WUXUU\:?k@h@k@c@a"
M 00132 - 702 - F: 3,00 E
IN THIS ISSUE
No. 40,529
Business 17
Crossword 16
Culture 13
Fashion 12
Sports 15
Views 6
EXECUTIVE PAY
INNOVATION NOT
IN THE EQUATION
PAGE 18 | BUSI NESS WI TH
SUZY MENKES
GLOBAL VISION
FROM DIOR
PAGE 12 | HAUTE COUTURE
SLAVE TRADE
A DISASTER AT
SEA REVISITED
PAGE 13 | CULTURE
CURRENCIES STOCK INDEXES
OIL
New York, MoNdaY 1:30pM MoNdaY
New York, MoNdaY 1:30pM
PREVIOUS
s euro 1= $1.3060 $1.3010
s pound 1= $1.5220 $1.5210
t Yen $1= 99.670 99.120
t S. Franc $1= SF0.9460 SF0.9450
s The dow 1:30pm 15,063.15 +1.03%
s FTSe 100 close 6,307.78 +1.49%
s Nikkei 225 close 13,852.50 +1.28%
s Light sweet crude $97.94 +$0.64
VIEWS
Bill Keller
What is happening in Turkey is the
latest in a series of revolts arising from
the middle class the urban, educated
haves who are the beneficiaries of the
regimes they nowreject. PAGE 6
Paul Krugman
Theres a nationwide movement in
America to punish the unemployed,
based on the proposition that we can
cure unemployment by making the
jobless even more miserable. PAGE 7
ONLINE
Narratives fromfading cultures
After three decades spent
photographing ancient cultures in
remote parts of the world, Chris Rainier
wants to give indigenous people the
tools to tell their own stories. His Last
Mile Technology Programbrings
digital tools and skills to these isolated
communities. The Lens blog has details,
as well as examples of Mr. Rainiers
own work. lens.blogs.nytimes.com
Ful l cur r ency rat es Page 21
Egypts army gives
Morsi ultimatum
CAIRO
BY DAVIDD. KIRKPATRICK,
KAREEMFAHIMANDBENHUBBARD
Egypts top generals on Monday gave
President Mohamed Morsi 48 hours to
respond to a wave of mass protests de-
manding his ouster, declaring that if he
did not, then the military leaders them-
selves would impose their own road
map to resolve the political crisis.
Their statement, in the formof a com-
muniqu read over state television,
plunged the military back into the cen-
ter of political life just 10 months after it
handed full power to Mr. Morsi as
Egypts first democratically elected
leader.
The communiqu was issued follow-
ing an increasingly violent weekend of
protests by millions of Egyptians angry
with Mr. Morsi and his MuslimBrother-
hood supporters. It came hours after
protesters destroyed the Brotherhoods
headquarters in Cairo.
In tone and delivery, the communiqu
echoed the announcement the Supreme
Council of the Armed Forces issued 28
months ago to oust President Hosni
Mubarak and seize full control of the
state. But the scope and duration of the
militarys latest threat of political inter-
vention and its consequences for
Egypts halting transition to democracy
were not immediately clear, in part
because the generals took pains to em-
phasize their reluctance to take over. It
is also not clear whether civilians will be
included in any next steps.
For Mr. Morsi and his Islamist allies
in the Muslim Brotherhood, however, a
military intervention would be an epic
defeat. It woulddenythemthe chance to
govern Egypt that the Brotherhood had
struggled 80 years to finally win, in
democratic elections, only to see their
prize snatched away after less than a
year.
Weunderstandit as amilitarycoup,
one adviser to Mr. Morsi said, speaking
on condition of anonymity to discuss
confidential deliberations. What form
that will take remains to be seen.
The militarys ultimatum seemed to
leave Mr. Morsi few choices: cut short
his termas president with a resignation
or early elections; share significant
power with a political opponent in a role
such as prime minister; or try to rally
his Islamist supporters to fight back for
power in the streets.
Mr. Morsis adviser said the military
shouldnot assume that the Brotherhood
would accept its ouster without an all-
out battle to defend his democratic vic-
tories. The Brotherhood may not take
this lying down, the adviser said.
Citing the historic circumstance,
the military council said in its statement
that if the demands of the people have
not been met within 48 hours, then the
armed forces would be forced by patri-
otic duty to announce a road map of
measures enforced under the militarys
supervision for the political factions to
settle the crisis.
Just what would meet the demands
of the people, the military did not spe-
cify. The rallying cry of the protests that
precipitated the announcement was the
demand for Mr. Morsis immediate de-
parture.
It remained possible, though, that
manymight accept a less-drastic power-
sharing measure until the election of a
newParliament expectedlater this year,
especially under military oversight.
But the military council also empha-
sized its reluctance to resume political
power. It has made the same disclaimer
at its seizure of power in 2011, but reiter-
ated more vigorously on Monday.
The armed forces will not be party to
the circle of politics or ruling, and the
military refuses to deviate from its as-
signedrole inthe original democratic vi-
sion that flows from the will of the
people, the statement said.
But it also noted that the political
WORLD NEWS
Tracking a deadly newvirus
Adeadly newrespiratory disease has
drawn the attention of scientists from
around the world to Saudi Arabia. PAGE 8
BUSINESS
Euro zone jobless rate at 12.1%
The increase in unemployment in May
underscored worries among
economists that growth would probably
remain too slowto generate large
numbers of jobs anytime soon. PAGE 17
France fines LVMH8 million
LVMHMot Hennessy Louis Vuitton
said it would appeal the decision by
French regulators over the manner in
which it built up a big stake in Hrmes
International. PAGE 17
Nokia buys out Siemens
By acquiring the 50 percent stake in
Nokia Siemens Networks that it does
not already own in a 1.7 billion deal,
Nokia secured ownership of a
profitable business. PAGE 19
Publishers wrap up merger
The newPenguin RandomHouse will
control more than 25 percent of the
English-language consumer book
market, giving it unmatched leverage
against Amazon.com. PAGE 19
Fallout builds over scope of U.S. spying efforts
PARIS
BY STEVEN ERLANGER
The most recent revelations of the enor-
mous scale of spying by the United
States on its allies threatened on Mon-
day to derail negotiations over a free
trade agreement with Europe, sowed in-
creasing disillusionment with President
Barack Obama in European capitals and
heightened concerns that the American
intelligence-gatheringapparatus has be-
come too big for careful oversight.
European lawmakers across the polit-
ical spectrum warned of a loss of confi-
dence in the Obama administration that
would make a free trade deal difficult.
While some of the comments were polit-
ical, even cynical from leaders of coun-
tries that also spy with great energy
against their allies, much of the anger
was also genuine, and it was accompan-
ied by fresh demands for explanations.
Daniel Cohn-Bendit, the Green Party
floor leader, spoke for many when he
said that the European Union must im-
mediately suspend negotiations with
the U.S. over a free trade agreement.
First, he said, we need a deal on data
protection so that something like that
never happens again.
Some of the harshest language came
from President Franois Hollande of
France, who said during a visit in north-
western France that we cannot accept
this kind of behavior between partners
and allies. He said the spying should
immediately stop.
Mr. Hollande suggested that talks on
a new trans-Atlantic trade pact, sched-
uled to start next week, should be
delayed until questions over the spying
issue were resolved and confidence re-
stored. We can only have negotiations,
transactions, in all areas once we have
obtained these guarantees for France,
but that goes for the whole European
Union, and I would say for all partners
of the United States, he said. Terrorism
is real and there are systems that have
to be checked, especially to fight terror-
ism, but I dont think that it is in our em-
bassies or in the European Union that
this threat exists.
Serena, like Roger and Rafael,
falls victimto Wimbledon hex
Surge in shadowbanking
has alarms ringing in China
longer be a surprise, this Wimbledon re-
sumed being weird and wondrous.
With Williams serving at 3-1, 40-15 in
the final set, Lisicki reeled off four
points in a row to break the Americans
serve and momentum. Lisicki pro-
ceeded to hit enough spots and shots
with conviction to bring a halt to Willi-
amss 34-match winning streak, too.
Lisickis 6-2, 1-6, 6-4 upset was the
latest and greatest reminder that no
superstar is safe at the All England Club
this summer. Rafael Nadal lost in the
first round to the 135th-ranked Belgian
Steve Darcis; Roger Federer lost in the CARL COURT/AGENCE FRANCE-PRESSE
Serena Williamss title hopes and 34-match winning streak were snapped on Monday.
TENNIS WIMBLEDON, ENGLAND
BY CHRISTOPHER CLAREY
After an early struggle and the loss of
the first set on Monday, Serena Willi-
ams kicked into the gear that has been
too much for any opponent to handle
since March.
Despite Sabine Lisickis powerful
serve and unmistakable gift for grass-
court tennis, Williams reeled off game
after game nine in a row in all to
take clear command of this tricky
fourth-round match.
Then, in a surprise that should no
SHANGHAI
BY DAVID BARBOZA
Text message solicitations began arriv-
ing on the mobile phones of many of
Chinas wealthyseveral days ago, prom-
isingaccess to lucrative wealthmanage-
ment products with yields far above the
governments benchmark savings rate.
One message read: China Mer-
chants Bank will issue a high interest fi-
nancingproduct startingfromJune 28th
to 30th. The product will be 90 days with
a 5.5%interest rate. Please call us now.
A day later came another. Warm re-
minder: The interest rate of yesterdays
product has been raised to 6%. (Product
duration is 90 days). There is limited ac-
cess to this product. First come first
served.
The offers are not coming fromfly-by-
night operators but some of the biggest
Chinese banks. They are raising huge
pools of cash to finance a relatively new
and highly profitable sideline business:
lending it outside the scrutiny of bank
regulators.
The complex way they go about mak-
ing off-the-balance-sheet loans is at the
heart of Chinas $6 trillion shadowbank-
CHINA, PAGE 21
Generals vow to impose
a road map in absence
of an answer to protests
Latest leak prompts allies
to question trans-Atlantic
ties and doubt Obama
EGYPT, PAGE 8
SERENA, PAGE 15
SPYING, PAGE 3
TARA TODRAS-WHITEHILL FOR THE NEW YORK TIMES
Army helicopters carrying Egyptian flags hovered near the presidential palace in Cairo on Monday as millions of Egyptians poured into the streets for a second day.
AT N.S.A, A REVEALING JOB DESCRIPTION
As infrastructure analyst, Edward J.
Snowden sought newways to break into
global Web and phone traffic. PAGE 3
RUSSIA PUTS CONDITION ON ASYLUM
President Putin said asylumwould not
be granted unless the publishing of
classified documents was halted. PAGE 3
GIANLUIGI GUERCIA/AFP
Protesters in Cairo on Monday. The mili-
tary gave the president a 48-hour deadline.
Tanzanian welcome Images of Barack Obama adorned the skirts on Monday
of women in Dar es Salaam, where he is visiting amid rising political tension. PAGE 4
Transformed Croatia joins E.U.
The countrys accession shows howthe
desire to join pushed it to make difficult
economic and political changes. PAGE 3
BEN CURTIS/THE ASSOCIATED PRESS
www.dior.com
page two
2 | TUESDAY, JULY 2, 2013 INTERNATIONAL HERALD TRIBUNE
. . . .
Printed in ATHENS | BALI | BANGKOK | BEIRUT | BELGIUM | BOLOGNA | DHAKA | DOHA | DUBAI | FRANKFURT | GALLARGUES | HONG KONG | INDIA | ISLAMABAD | ISTANBUL | JAKARTA | KARACHI | KUALA LUMPUR | KUWAIT | LAHORE | LONDON | MADRID | MALTA | MANILA | MOSCOW
NEPAL | OSAKA | PARIS | SO PAULO | SEOUL | SINGAPORE | SWEDEN | SWITZERLAND | SYDNEY | TAIPEI | TEL AVIV | TOKYO | U.S. Subscription Inquiries: Europe 00 800 44 48 78 27 (toll-free) Other countries +33 1 41 43 93 61; E-mail subs@iht.com; Fax +33 1 41 43 92 10
Advertising Inquiries: +33 1 41 43 92 06; Fax +33 1 41 43 92 12 Printer: Paris Offset Print, 30, rue Raspail, 93120 La Courneuve.
their lives, said the broadcaster Mi-
chael Buerk, rehearsing one side of a
debate that is now seizing Britain and
other Western societies.
Britains baby boomers enjoyed a
time of no major war, entirely free
education and health care, Mr. Buerk
said, their lives enriched by ever-
rising house prices and, often, gener-
ous unrepeatable pensions all, its
argued, bought at the expense of future
generations, whose lives will be impov-
erished by paying for our good for-
tune.
Perhaps its a pity that the young
cant visit the past the way they visit
Ibiza, he said, recalling the baby
boomers hardscrabble roots in an era
before widespread foreign travel when
even single-channel black-and-white
television was a luxury.
Now, the near-universal presumption
of ever-expanding horizons the
promise of the Thatcher era has
been supplanted by deficit-driven belt-
tightening set to endure well beyond
initial government forecasts. Austerity
is the new mind-set.
As much of Continental Europe con-
fronts shrinking expectations in the
euro crisis from Athens to Lisbon and
beyond, Britain faces its own bitter
hangover from a credit-fueled decade
of binge-spending and soaring prop-
erty values that came to a shuddering
halt when the financial crisis of 2008
gave the lie to Tony Blairs triumphant
battle cry in 1997: Things can only get
better.
Who makes such bold claims now
when so much economic data fuel
dystopian visions?
Youth unemployment, lower than in
some parts of Southern Europe, still
leaves one in five Britons between the
ages of 16 and 24 out of work. For many,
the notion of job security, certainly jobs
for life, is no more than a faint, mocking
memory. What employers call labor
market flexibility spells joblessness for
others.
The gap between rich and poor is
widening, magnified by austerity mea-
sures likely to cut welfare benefits so
that the greatest hardship falls on
those who are already among the most
deprived rather than among well-
heeled bankers whose greed is widely
blamed here for the economic malaise.
As the economic and especially the
jobs crisis persists and fiscal consolida-
tion takes hold, said the Paris-based
Organization for Economic Coopera-
tion and Development, there is a
growing risk that the most vulnerable
in society will be hit harder as the cost
of the crisis increases.
When my neighbor died, a daughter
took time off from work and a son flew
home from a job in the United States. A
family, in other words, closed ranks, so-
cietys most basic unit rallying to ab-
sorb abrupt loss.
More broadly, though, after decades
of flux when the old social underpin-
nings and taboos have loosened, that
nuclear support may no longer be an
option for many contemplating far
harder times than their elders, beyond
the familiar economic cycles. Is this
just a sad fact of the recession, Mr.
Buerk asked, or is it a greater moral
crime being committed here genera-
tional theft?
E-MAIL: pagetwo@iht.com
Alan
Cowell
LETTER FROM EUROPE
LONDON A neighbor died the other
day.
One moment, it seemed, he was busy
on his morning routines, dropping off
the newspaper outside a friends first-
floor apartment as he walked the stairs
to his third-floor home.
The next (it seemed to come so
quickly) there was an absence a face
and a greeting that would no longer fig-
ure among the neighborhoods way-
markers, the florist, the car wash guys,
the vicar and his dog.
Of course, the death zone stalks all of
us, from 18-year-old soldiers far from
home in Afghanistan, to toddlers dying
of crib death or abuse or infection.
On the same day that the neighbor
died in the early
hours of organ fail-
ure, Ian Brady, one of
Britains most notori-
ous serial killers,
was permitted to
break a 50-year en-
forced silence to de-
scribe his part in the
1960s Moors murders
of young children as
an existential expe-
rience.
Death has many visages, none of
them enticing.
But the neighbor had grown along-
side a generation that is passing the
baby boomers now approaching termi-
nal years of frailty and need, offering a
legacy so different from the promise
that they inherited from the revival of
Europe after World War II, when
deprivation slowly gave way to better
times. Most Britons have never had it
so good, a patrician prime minister,
Harold Macmillan, told his lower-born
compatriots in 1957 as Britain
struggled to shake off a dreary decade
of rationing and slow recovery.
Of course, there were bumps along
the way the winter of discontent of
the late 1970s, the strikes of the 1980s.
But, in general, deference ceded to self-
confidence. The national trajectory
soared rather than swooned. The ethic
of self-betterment, buttressed by op-
portunity, shielded by a welfare state,
seemed to bear out a pledge of genera-
tional advance: The next generation
would eclipse its forebears.
And those, like my neighbor, whose
lives spanned those years, emerged as
a generation who have had it good all
1913 Greeks and Bulgars Fight
ATHENS After twelve hours fighting, the
last Bulgarian detachment garrisoned in
the barracks near the Church of St. De-
metrius, in Salonica, surrendered this
morning to the Greek troops. As a result
of the fighting on the Greco-Bulgarian
frontier, the Greek authorities had given
the Bulgarian troops still at Salonica one
hour in which to lay down their arms.
The Bulgarians allowed the hours grace
to expire without surrendering, and the
barracks were then attacked by the
Greek troops. The Greek artillery fired
more than two hundred shells against
the barracks and houses occupied by the
Bulgarians, the walls of which were
knocked to pieces. All the streets were
guarded by troops to prevent a panic
among the inhabitants. Several Bulgari-
an officers and soldiers took to flight and
entered trains leaving for Serres, but on
reaching the Greek outposts they were
stopped and sent back to Salonica. After
their surrender the Bulgarian troops
were marched to the harbor amid the
cheers of the populace, and were em-
barked upon a Greek steamship to be
transported to the interior of Greece.
1938 Battle of Gettysburg Refought
GETTYSBURG, PA. The Battle of Gettys-
burg, the turning point of the Civil War,
was fought over again today by 800
white-haired veterans of that historic en-
gagement, who gathered here to partic-
ipate in the ceremonies in commemora-
tion of the seventy-fifth anniversary of
the conflict. With the aid of canes and the
support of friendly arms, the veterans of
the Confederate and Union Armies
hobbled over the battlefield where they
bitterly fought each other in their youth.
FromOak Hill to Devils Den, the old
men inspected what remains of the scene
of the battle the first three days of July,
1863, and rebel yells echoed shrilly over
Wheatfield, Peach Orchard and Bloody
Angle, as they did three-quarters of a
century ago. Secretary of War Harry H.
Woodring, who, with Governor George
H. Earle, addressed the 800 of the 2,000
survivors who were present, said: I
knowI speak for all the people of the land
in welcoming these veterans and extend-
ing to themour love and admiration. . . .
Howwell these soldiers fought is at-
tested by the thousands sleeping today
in this field, where they fell. . . . We can
pay only an inadequate homage to their
memory, courage and sacrifice.
1963 Kennedy Worried on France
WASHI NGTON President Kennedy,
deeply concerned over French Presi-
dent Charles de Gaulles attitudes to-
ward the North-Atlantic Treaty Organi-
zation, has asked whether Allied
dependence on supply lines through
France could be cut to the minimum. Ac-
cording to memoranda reaching here of
conversations the President has had so
far during his trip abroad, Mr. Kennedy
has asked top Allied leaders specifically
why the newmultimillion-dollar NATO
oil pipeline complex to West Germany
could not be moved out of France. It
would presumably be routed through
countries more enthusiastic about
NATOcooperation, such as Belgium.
However, it is reliably understood that
the NATOofficials argued strongly
against such rerouting. It would cost too
much, they said, and France provides
more of an operating base. President
Kennedy left for Europe in a disquieting
atmosphere, the diplomats point out, as
a result of Frances withdrawal only a
fewdays earlier of its Atlantic fleet from
NATOJurisdiction.
LACONIA, NEW HAMPSHIRE
BY ELISABETH ROSENTHAL
Seven months pregnant, at a time when
most expectant couples are stockpiling
diapers and choosing car seats, Rene
Martin was struggling with bigger pur-
chases.
At a prenatal class in March, she was
told about epidural anesthesia and was
given the option of using a birthing tub
during labor. To each offer, she had one
gnawing question: How much is that
going to cost?
Though Ms. Martin, 31, and her hus-
band, Mark Willett, are both profession-
als with health insurance, her current
policy does not cover maternity care. So
the couple had to approach the nine
months that led to the birth of their
daughter in May like an extended shop-
ping trip though the American health
care bazaar, sorting through an array of
maternity services that most often have
no clear price and trying to negotiate
discounts fromhospitals and doctors.
Whenshe became pregnant, Ms. Mar-
tin called her local hospital inquiring
about the price of maternity care; the fi-
nance office at first said it did not know,
and then gave her a range of $4,000 to
$45,000. It was unreal, Ms. Martin
said. I was like, How could you not
knowthis? Youre a hospital.
Midway through her pregnancy, she
fought for a deep discount on a $935 bill
for an ultrasound, arguing that she had
already paid a radiologist $256 to read
the scan, whichtookonly20 minutes of a
technicians time using a machine that
had been bought years ago. She ended
up paying $655. I feel like Imin a used-
car lot, said Ms. Martin, a former art
gallery manager who is starting gradu-
ate school in the autumn.
Like Ms. Martin, plenty of other preg-
nant women are getting sticker shock in
the United States, where charges for de-
livery have about tripled since 1996, ac-
cording to an analysis conducted for
The New York Times by Truven Health
Analytics. Childbirth in the United
States is uniquely expensive, and ma-
ternity and newborn care constitute the
single biggest category of hospital pay-
outs for most commercial insurers and
state Medicaid programs. The cumula-
tive costs of approximately four million
annual births is well over $50 billion.
And though maternity care costs far
less in other developed countries than it
does in the United States, studies show
that their citizens do not have less ac-
cess to care or to high-tech care during
pregnancy than Americans.
Its not primarily that we get a dif-
ferent bundle of services when we have
a baby, said Gerard Anderson, anecon-
omist at the Johns Hopkins School of
Public Health who studies international
health costs. Its that we pay individu-
ally for each service and pay more for
the services we receive.
Those payment incentives for pro-
viders also mean that American women
with normal pregnancies tend to get
more of everything, necessary or not,
from blood tests to ultrasound scans,
said Katy Kozhimannil, a professor at
the University of Minnesota School of
Public Health who studies the cost of
womens health care.
Financially, they suffer the con-
sequences. In 2011, 62 percent of women
in the United States covered by private
plans that were not obtained through an
employer lacked maternity coverage,
like Ms. Martin. But even many women
with coverage are feeling the pinch as
insurers demand higher co-payments
and deductibles and exclude many
pregnancy-related services.
From 2004 to 2010, the prices that in-
surers paid for childbirth one of the
oldest and most universal medical en-
counters rose 49 percent for vaginal
births and 41 percent for Caesarean sec-
tions in the United States, with average
out-of-pocket costs rising fourfold, ac-
cording to a recent report by Truven
that was commissioned by three health
care groups. The average total price
charged for pregnancy and newborn
care was about $30,000 for a vaginal de-
livery and $50,000 for a C-section, with
commercial insurers paying out an av-
erage of $18,329 and $27,866, the report
found.
Women with insurance pay out of
pocket anaverage of $3,400, accordingto
a survey by Childbirth Connection, one
of the groups behind the maternity costs
report. Two decades ago, women typic-
allypaidnothingother thana small fee if
they opted for a private hospital room.
In most other developed countries,
comprehensive maternity care is free or
cheap for all, considered vital to ensur-
ing the health of future generations.
Ireland, for example, guarantees free
maternity care at public hospitals,
though women can opt for private deliv-
eries for a fee. The average price spent
on a normal vaginal delivery tops out at
about $4,000 in Switzerland, France and
the Netherlands, where charges are
limited through a combination of regu-
lation and price setting; mothers pay
little of that cost.
Thechasminpriceis trueeventhough
new mothers in France and elsewhere
often remain in the hospital for nearly a
week to heal and learn to breast-feed,
while American women tend to be dis-
chargedadayor twoafter birth, since in-
surers do not pay costs for anything that
is not considered medically necessary.
Onlyinthe UnitedStates is pregnancy
generally billed item by item, a practice
that has spiraledinthe past decade, doc-
tors say. No item is too small. Charges
that 20 years ago were lumped together
and covered under the general hospital
fee are now broken out, leading to more
bills and inflated costs: There are sepa-
rate fees for the deliveryroom, the birth-
ing tub and each night in a semiprivate
hospital room, typically thousands of
dollars. Even removing the placenta can
be coded as a separate charge.
Each new test is a new source of rev-
enue, fromthe hundreds of dollars billed
for the simple blood typing required be-
fore each delivery to the $20 or so for the
splash of disinfectant on the umbilical
cord (price per bottle at a chain phar-
macy: $2.59). Obstetricians, who used to
do routine tests like ultrasounds in their
office as part of their flat fee, nowcharge
for theserviceor farmout suchtestingto
radiologists, whose rates are far higher.
Add up the bills, and the total is star-
tling. Weve created incentives that
encourage more expensive care, rather
than care that is good for the mother,
said Maureen Corry, the executive di-
rector of Childbirth Connection.
In almost all other developed coun-
tries, hospitals anddoctors receive a flat
fee for the care of an expectant mother,
and while there are guidelines, women
have a broad array of choices. There
are no bills, and a hospital doesnt get
paid for doing specific things, said
Charlotte Overgaard, an assistant pro-
fessor of public health at Aalborg Uni-
versity in Denmark. If a woman wants
acupuncture, an epidural or birth in wa-
ter, thats what shell get.
Despite its lavish spending, the
United States has one of the highest
rates of both infant and maternal death
among industrialized nations, although
the fact that poor and uninsured women
and those whose insurance does not
cover childbirth have trouble getting or
paying for prenatal care contributes to
those figures.
Some social factors drive up the ex-
penses. Mothers are now older than
ever before, andtherefore more likelyto
require or request more expensive
prenatal testing. And obstetricians face
the highest malpractice risks among
physicians and pay hundreds of thou-
sands of dollars a year for insurance,
fostering a more is safer attitude.
With costs spiraling, some hospitals
are starting to offer all-inclusive rates
for pregnancy. Maricopa Medical Cen-
ter, a public hospital in Phoenix, began
offering uninsured patients a compre-
hensive package two years ago. Mak-
ing women choose during labor wheth-
er you want to pay $1,000 for an
epidural, that didnt seem right, said
Dr. Dean Coonrod, the hospitals chief of
obstetrics and gynecology.
The hospital charges $3,850 for a va-
ginal delivery, with or without an epi-
dural, and $5,600 for a planned C-section
prices that include standard hospital,
doctors and testing fees. To set the
price, the hospital, which breaks even
on maternity care and whose doctors
are on salaries, calculated the average
payment it gets fromall insurers.
The Catalyst for Payment Reform, a
California policy group, has proposed
that all hospitals should offer such
bundled prices and that rates should be
the same, regardless of the type of deliv-
ery. It says that $8,000 might be a reason-
able starting point. But that may be hard
toimagineinmarkets likeNewYorkCity,
where $8,000 is less than many private
doctors charge for their fees alone.
One factor that has helped keep costs
down in other developed countries is
the extensive use of midwives, who per-
form the bulk of prenatal examinations
and even simple deliveries; obstetri-
cians are regarded as specialists who
step in only when there is risk or need.
Sixty-eight percent of births are attend-
ed by a midwife in Britain and 45 per-
cent in the Netherlands, compared with
8 percent in the United States.
To control costs in the United States,
patients may also have to alter their ex-
pectations, including the presence of an
obstetrician at every prenatal visit and
delivery. Its amazing how much pa-
tients buyinto our tendencyto do a lot of
tests, said Eugene Declercq, a profes-
sor at Boston University who studies in-
ternational variations in pregnancy.
Weve met the problem, and its us.
Starting next year, insurance policies
will be required under the Affordable
Care Act to include maternity coverage,
so no woman should be left paying en-
tirely on her own, like Ms. Martin. But
the law is not explicit about what ser-
vices must be included in that coverage.
Exactly what that means is the crux of
the issue, Dr. Kozhimannil, the studys
lead author, said.
Even women with the best insurance
canstill encounter highprices. After her
daughter was born seven years ago, Dr.
Marguerite Duane, 42, was flabbergas-
ted by the line items on the bills, many
for blood tests she said were unneces-
sary and medicines she never received.
She and her husband, Dr. Kenneth Lin,
both associate professors of family
medicine at Georgetown Medical
School, had delivered babies in their
early years of practice.
So when she became pregnant again
in 2011, she decided to be more assertive
about holding down costs. Though she
delivered her son Isaac with a midwife
12 minutes after arriving at the hospital
and was home the next day, the hospital
bill alone was more than $6,000, and her
insurance co-payment was about $1,500.
Most insurance companies wouldnt
blink at my bill, but it was absurd it
was the least medical delivery in his-
tory, said Dr. Duane. There were no
meds. I had no anesthesia. He was never
in the nursery. I even brought my own
heatingpad. I triedtoget anexplanation,
but there were items like maternitysup-
plies. What was that? Adiaper?
Ms. Martin could not stop fretting
about the potential cost of a complicated
delivery as her due date neared. I
know that a C-section could ruin us fi-
nancially, she said. On May 25, she had
a healthy daughter, Isla Daisy, born by
vaginal delivery. Mother and daughter
went home two days later.
She and her husband are both over-
joyed and tired. And, she said, they are
dreading the bills, which she esti-
mates will be over $32,000 before negoti-
ations begin. Her labor was induced,
which required intense monitoring, and
she also had an epidural.
Pregnant women in U.S.
face costliest array of fees
in world to birth children
Say so long
to having it
so good
JOSH HANER/THE NEW YORK TIMES
When Rene Martin called her hospital to enquire about the cost of maternity care, she was given a range of $4,000 to $45,000.
IN OUR PAGES 100, 75, 50 YEARS AGO
Postpartum sticker shock
As the baby
boomers
approach
frailty, they
offer a legacy
so different
from the
promise they
inherited.
Its amazing how much
patients buy into our tendency
to do a lot of tests. Weve met
the problem, and its us.
The costs of childbirth
Sources: International Federation of Health Plans
AVERAGE 2012 AMOUNT PAID FOR CHILDBIRTH, BY COUNTRY
CAESAREAN CONVENTIONAL DELIVERY
United States
Argentina
Switzerland
France
Chile
Netherlands
Britain
New Zealand
Spain
South Africa
$15,041
1,541
5,186
6,441
3,378
5,328
4,435
4,717
3,097
3,449
$9,775
1,188
4,039
3,541
2,992
2,669
2,641
2,386
2,265
2,035
Note: Amounts paid are the actual payments agreed to by insurance companies or other payers
for services, and are lower than billed charges. Amounts shown include routine prenatal,
delivery and postpartum obstetric care, including ultrasound, amniocentesis, chorionic villus
sampling, fetal contraction stress test and home visits. Care provided by practitioners other than
the obstetrician such as ultrasounds performed by a radiologist or blood testing by a lab
are not included in this tally.
Maternity care and childbirth cost far more in the United States than in other
developed countries, but studies show that those countries citizens do not have
less access to care during pregnancy than Americans.
TUESDAY, JULY 2, 2013 | 3 THE GLOBAL EDITION OF THE NEW YORK TIMES
. . . .
World News
europe
PARIS
BY DAN BILEFSKY
Croatia became the 28th member of the
European Union on Monday, a joyous
moment for the small, predominantly
Catholic country some 20 years after it
won independence in the bloody wars of
the Balkans.
With Europe roiled by financial crisis,
Croatias accessionoffers araremoment
of satisfaction for the Union, underlining
howacountrys desire tojointhe worlds
biggest trading bloc can push it to make
difficult economic and political changes.
Sincetheendof theColdWar, theEuro-
pean blocs soft power its ability to
press for concessions fromcountries that
want to jointhe clubhas beena power-
ful foreign policy tool and an alternative
toU.S. militarymight. Inthecaseof Croa-
tia, the incentive of joining the union
pushed it to revamp a statist post-Com-
munist economy, pass morethan350new
laws, and arrest more than a dozen Croa-
tian and Bosnian-Croat war criminals.
In return, Croatia stands to benefit
from gaining access to a market of 500
million consumers as well as about 18
billion, or $23.5 billion, in financing ear-
marked for the country between 2014
and 2020.
Elsewhere in the region, Serbia and
Kosovo recently signed a power-shar-
ing agreement aimed at overcoming
ethnic enmities and proving to E.U. offi-
cials in Brussels that they have the
European credentials to join the bloc.
On Friday, they were rewarded for their
efforts, with Serbia receiving the go-
ahead to start entry negotiations in
January and Kosovo gaining closer
trade, economic and political ties.
The accession of Croatia marks an im-
portant step in the European integra-
tion of one of Europes poorest regions,
one that has struggled to throwoff a leg-
acy of war and bloodshed. Serbia, Bos-
nia and Herzegovina, Macedonia,
Montenegro and Kosovo states
carved from the former Yugoslavia
are all hoping to join the bloc. Slovenia
joined in 2004.
Croatias entry is the Unions first en-
largement since 2007, when Romania
and Bulgaria joined. In 2004, 10 coun-
tries joined, including the Czech Repub-
lic, Hungary and Poland.
To mark the occasion in Zagreb, the
capital, thousands of Croatians turned
out to celebrate; fireworks exploded
and Beethovens Ode to Joy was
played at midnight. This will change
the life of this nation for good. I welcome
you wholeheartedly, Herman Van
Rompuy, the president of the European
Council, told the crowd.
But many Croatians remain ambiva-
lent about joiningaunionmiredinacrip-
pling debt crisis that has ensnared
Greece, Spain, Italy and others and
pushed some members to the brink of
bankruptcy. While Croatia is not joining
the euro zone, the source of the worst of
Europes economic problems, it is never-
theless inrecessionandis sufferingfrom
DIMITAR DILKOFF/AGENCE FRANCE-PRESSE
Croats gathered in central Zagreb to celebrate at midnight Sunday as their country joined the European Union. Croatia is the first country to be admitted to the bloc since 2007.
WASHINGTON
BY SCOTT SHANE
AND DAVID E. SANGER
U.S. intelligence officials refer to Ed-
ward J. Snowdens job as a National Se-
curity Agency contractor as systems
administrator a bland name for the
specialists who keep the computers
humming. But his last jobbefore leaking
classified documents about N.S.A. sur-
veillance, he told The Guardian, was ac-
tually infrastructure analyst.
It is a title that officials have carefully
avoided mentioning, perhaps for fear of
inviting questions about the agencys
aggressive tactics: An infrastructure
analyst at the N.S.A., like a burglar cas-
ing an apartment building, looks for
new ways to break into Internet and
telephone traffic around the world.
That assignment helps explain how
Mr. Snowden got hold of documents lay-
ing bare the top-secret capabilities of
the United States largest intelligence
agency, setting off a far-reaching politic-
al and diplomatic crisis for the Obama
administration.
Mr. Snowden, who planned his leaks
for at least ayear, has saidhe tookthe in-
frastructure analyst position with Booz
Allen Hamilton in Hawaii in March, evi-
dently taking a pay cut, to gain access to
a fresh supply of documents.
My position with Booz Allen
Hamilton granted me access to lists of
machines all over the world the N.S.A.
hacked, he told The South China Morn-
ing Post before leaving Hong Kong a
week ago for Moscow, where he has
been in limbo in the transit area of
Sheremetyevo Airport. That is why I
accepted that position about three
months ago.
Aclose reading of Mr. Snowdens doc-
uments shows the extent to which the
eavesdropping agency now has two
new roles: It is a data cruncher, with an
appetite to sweep up, and hold for years,
a staggeringvarietyof information. And
it is an intelligence force armed with
cyberweapons, assigned not just to
monitor foreign computers but also, if
necessary, to attack.
After the 2001 terrorist attacks, the
documents suggest, the N.S.A. decided
it was too risky to wait for leads on spe-
cific suspects before going after relev-
ant phone and Internet records. So it fol-
lowed the example of the hoarder who
justifies stacks of paper because
someday, somehow, a single page could
prove vitally important.
Indeed, an obscure passage in one of
the Snowden documents rules for col-
lecting Internet data that the Obama ad-
ministration wrote in secret in 2009 and
that the Foreign Intelligence Surveil-
lance Court approved suggested that
the government was concerned about
its ability to process all the data it was
collecting. So it got the court to approve
an exception allowing the government
to hold on to that information if it could
not keep up. The rules said that the
communications that may be retained
for up to five years include electronic
communications acquired because of
the limitation on the N.S.A.s ability to
filter communications.
As one private expert who sometimes
advises the N.S.A. on this technology
put it: This means that if you cant de-
salinate all the seawater at once, youget
to hold on to the ocean until you figure it
out.
Collecting that ocean requires the
brazen efforts of tens of thousands of
technicians like Mr. Snowden. On
Thursday, Mr. Obama played down Mr.
Snowdens importance, perhaps con-
cernedthat the manhunt was itself dam-
aging the image and diplomatic rela-
tions of the United States. No, Im not
going to be scrambling jets to get a 29-
year-old hacker, the president said
during a stop in Senegal.
Mr. Obama presumably meant the
term to be dismissive, suggesting that
Mr. Snowden(who turned30 onJune 21)
was a young computer delinquent. But
as an N.S.A. infrastructure analyst, Mr.
Snowden was, in a sense, part of the
United States biggest and most skilled
teamof hackers.
The N.S.A., Mr. Snowdens docu-
ments show, has worked with its British
counterpart, Government Communica-
tions Headquarters, to tap into hun-
dreds of fiber optic cables that cross the
Atlantic or go on into Europe, with the
N.S.A. helping sort the data. The disclo-
sure revived old concerns that the Brit-
ish might be helping the N.S.A. evade
U.S. privacy protections, an accusation
that U.S. officials flatly deny.
Mr. Snowdens collection of pilfered
N.S.A. documents has cast an awkward
light on officials past assurances to
Congress and the public about their con-
cern about Americans privacy.
It was only in March that James R.
Clapper Jr., the director of national in-
telligence, told a Senate committee that
the N.S.A. did not collect data on mil-
lions of Americans. Mr. Snowdens re-
cords forced Mr. Clapper to backtrack,
admitting his statement was false.
Even in the unaccustomed spotlight
after the N.S.A. revelations, intelligence
officials have concealed more than they
have revealed in careful comments,
fearful of alerting potential eavesdrop-
ping targets to agency methods.
In fact, as Mr. Snowdens documents
have shown, the omnivorous agencys
operations range far beyond terrorism,
targeting foreigners of any conceivable
interest. British eavesdroppers working
withtheN.S.A. penetratedLondonmeet-
ings of the Group of 20 industrialized na-
tions, partly by luring delegates to fake
Internet cafes, and the N.S.A. hacked in-
to computers at Chinese universities.
At Fort Meade, on the N.S.A.s heavily
guarded campus off the Baltimore-
WashingtonParkwayinMaryland, such
disclosures are seen as devastating tip-
offs to targets. The disclosure in Mr.
Snowdens documents that Skype is co-
operating with orders to turn over data
to the N.S.A., for example, undermined
a widespread myth that the agency
could not intercept the voice-over-Inter-
net service. Warned, in effect, by Mr.
Snowden, foreign officials, drug cartel
leaders and terrorists may become far
more careful about how, and howmuch,
they communicate.
REUTERS BREAKINGVIEWS
The real benefits of E.U. accession for
Croatia policy overhauls and political
stability are uncertain. PAGE 22
Job title gave Snowden special access to secrets
Leaker helped N.S.A.
in its search for new
targets around the world
Atransformed Croatia becomes 28th E.U. member
an unemployment rate of 21 percent.
Alluding to the challenges of entering
a club in decline, President Ivo Josi-
povic of Croatia told Nova TV on Satur-
day that he was repeatedly asked by
journalists from other European coun-
tries why Zagreb wanted to join.
My counter question was: You
come fromthe E.U. Is your country pre-
paring to leave the bloc? They would
invariably reply: Of course not. Well,
there you go, thats why we are joining,
because we also believe the E.U. has a
future, he said.
If some Croats are cautious about
membership, many countries inthe bloc
remain weary of expansion, fearing that
an overstretched European Union will
become unmanageable. The problem of
endemic corruption in new member
states from the east like Bulgaria and
Romania has also fanned fears in Brus-
sels that countries are being admitted
too quickly, and importing lawlessness
and graft into the bloc.
Transparency International ranked
Croatia as the 62nd most troubled na-
tion out of 176 countries in its 2012 cor-
ruption perception index, which ranks
countries based on how corrupt their
public sector is seen as being. That com-
pared with Romania at 66, Bulgaria at
75, Italy at 72 and Greece at 94.
Marko Prelec, Balkans director at the
International Crisis Group in Sarajevo,
said Croatia was an important test case
for whether other countries in the re-
gion would be admitted to the Union. If
Croatia turns into a problem child for
the E.U., then its going to be next to im-
possible for anyone else to join, he said.
But if it goes well, then the doors will
be open for its neighbors, too.
Changes include slate
of new laws, economic
overhaul and war arrests
This will change the life of
this nation for good. I
welcome you wholeheartedly,
a top E.U. official told Croats.
Revelations of U.S. spying
imperil Europe trade pact
SPYING, FROM PAGE 1
France has been a critic of the pro-
posed free-trade deal, trying to ensure
that its key interests, which include do-
mestic production of films and videos
and agriculture, are protected.
AndFrance is also well-knownas hav-
ing a sophisticated, well-funded intelli-
gence system that also spies on allies
and enemies to protect French national
and commercial interests.
France is a cynical country, said
Franois Heisbourg, a defense expert.
We all spy, but the difference here is
the scale up to 60 million connections
in Germany in a day! That spies go
spearfishing after particular targets
is one thing, he said. But no one has un-
derstood that our societies were being
spied onso massively this isnt spear-
fishing but trawling with a big, big net.
Thats the real shocker.
What also troubles people is the sense
that the United States, having unlim-
ited means, means they use them be-
cause they exist, and this speaks poorly
of checks and balances in the system.
Mr. Heisbourg wondered if Obama
thought he was telling the truth in the
Berlin speech, since spying on the
E.U. was particularly revealing.
Fleur Pellerin, Frances minister for
the digital economy, said that what
shocked her was generalized surveil-
lance of populations thats an affair
completely different from espionage,
its much more serious.
Camille Grand, director of the Foun-
dation for Strategic Research, said that
the revelations fed into a growing dis-
appointment with Obama in Europe
that is fed on the drone program and
Guantanamo Bay. For allied intelli-
gence services to spy on one another is
not new, he said, especially in trade ne-
gotiations and commercial dealings.
But its complicated the view of
Obama, to realize hes a rather standard
U.S. president, using all the tools at his
disposal.
Mr. Obama has told Americans that
Prism is not aimed at them, only at for-
eigners, Mr. Grand said. Then we find
out that policy doesnt apply to Amer-
icas allies. It creates a lot of skepti-
cism.
While France, Germany and other al-
lies are also spying, there is a large im-
balance in terms of technical means,
which adds to the discomfort. James
Bamford, the author of a book about the
N.S.A., The Puzzle Palace, said that
the latest technology gives the United
States a huge qualitative advantage
over its partners. The difference is,
youre comparing eavesdropping with a
nuclear weapon to eavesdropping with
a cannon, he said. These countries
dont have anywhere near the capacity
that the N.S.A. does in terms of their ca-
pacity to do to us what we do to them.
That can confer an immense edge, he
said, adding, Its the equivalent of go-
ing to a poker game and wanting to
know what everyones hand is before
you place your bet.
Mr. Bamford, like others, said that
Washingtons interest in Germany was
understandable, both because of its
political and economic clout and the fact
that the Sept. 11 terror plot was hatched
in Harburg, near Hamburg.
The reaction was particularly angry
in Germany, with its history of Nazism
and the East German Stasi, made more
acute by the revelation that a large part
of the American interception efforts
were aimed at that country capturing
up to half a billion communications
every month in a country of only 82 mil-
lion people.
Mr. Obama was just in Berlin on June
19, giving a speech in which he ex-
plained that the U.S. Prism program of
metadata collection was about counter-
terrorism in the interests of all allies.
But the newrevelations fromEdward J.
Snowden, appearing on Sunday in Der
Spiegel Online and in The Guardian
newspaper, indicated that U.S. spying
and data collection included the Euro-
pean Union offices in Brussels and
Washington, which struck many as un-
likely places to find terrorists.
Elmar Brok, an outspoken German
who chairs the European Parliaments
foreignaffairs committee, saidthat the
spying has reached dimensions that I
did not think were possible for a demo-
cratic country. He said the United
States has lost all balance George
Orwell is nothing by comparison.
Mr. Obama said in Tanzania that he
had directed his staff to examine the
latest reports regarding spying on
UnitedStates allies. We will take a look
at this article, figure out what they may
or may not be talking about and then
well communicate with our allies ap-
propriately, Mr. Obama said.
He said of every intelligence service:
Heres one thing that theyre going to
be doing: theyre going to be trying to
understand the world better and whats
going on in world capitals around the
world, from sources that arent avail-
able through The New York Times or
NBC News.
If that werent the case, then thered
be no use for an intelligence service, he
said, adding that I guarantee you that
in European capitals, there are people
who are interested in, if not what I had
for breakfast, at least what my talking
points might be should I end up meeting
with their leaders. Thats how intelli-
gence services operate.
Reporting was contributed by Brian
Knowlton fromWashington; Michael D.
Shear fromDar es Salaam, Tanzania;
Melissa Eddy fromBerlin; and Rick
Gladstone fromNewYork.
MOSCOW
BY ANDREW ROTH
AND ELLEN BARRY
President Vladimir V. Putin said Mon-
day that Edward J. Snowden, the former
national security staffer accused of es-
pionage, would not receive political
asylum in Russia unless he stopped
publishing classified documents that
hurt the interests of the United States.
At a news conference here, Mr. Putin
pushed back against efforts by the
United States to persuade the Russian
government to extradite Mr. Snowden.
But hesaidMr. Snowdenwas not likelyto
stoppublishingleaks, suggestingthat his
chances of staying in Russia were slim.
Russia never gives up anyone to
anybody and is not planning to, Mr.
Putin said. He added, If he wants to go
somewhere and they accept him,
please, be my guest. If he wants to say
here, there is one condition: He must
cease his work aimed at inflicting dam-
age to our American partners, as
strange as it may sound frommy lips.
Mr. Putins remarks came eight days
after Mr. Snowden arrived on an Aero-
flot flight from Hong Kong, apparently
intending to board a connecting flight
headed for Latin America. After that, it
seemed that Mr. Snowden and Sarah
Harrison, a WikiLeaks activist who is
traveling with him, got caught in a geo-
political limbo. Mr. Snowdens U.S. pass-
port has been revoked and he has been
unable to leave the transit zone.
With Ecuador, his original destina-
tion, evidently wavering, Mr.
Snowdens options seem to have nar-
rowed, and his stopover at Shere-
metyevo airport here now threatens to
stretch into weeks.
Mr. Snowden has applied for political
asylum in Russia, a Russian immigra-
tion official said Monday. According to
theofficial, whospokeontheconditionof
anonymity because he was not author-
ized to discuss the case, Ms. Harrison
hand-delivered Ms. Snowdens applica-
tionto a Russianconsulate inTerminal F
of the airport late Sunday evening.
A Foreign Ministry official told The
Los Angeles Times on Monday that Mr.
Snowden had applied to 15 different
countries for political asylum, giving
them the appeals at a Monday morning
meeting. The official characterized the
applications as a desperate measure
on Mr. Snowdens part, after Ecuado-
rean officials said that the Ecuadorean
travel document he was using was in-
valid.
The official said that Mr. Snowdens
application for political asylum in Rus-
sia had not received a response from
Russianofficials inthe ForeignMinistry
as of Monday evening.
Ellen Barry contributed reporting.
U.S. ties to China intact
Secretary of State John Kerry said Mon-
day that relations with China would not
be upset by allegations that it had facil-
itated Mr. Snowdens flight from Hong
Kong, Michael R. Gordon reported from
Bandar Seri Begawan, Brunei, where
Mr. Kerry arrived after four days of in-
tensive diplomacy in the Middle East
Mr. Snowdens ability to avoid deten-
tion and travel to Moscow despite a re-
quest by the United States that he be ar-
rested initially led to an angry response
by Obama administration officials. The
White House last week described the de-
velopment as a serious setback to
American-Chinese relations. But follow-
ing a meeting with his Chinese counter-
part at a conference hosted by Southeast
Asiannations inBrunei, Mr. Kerrystruck
a conciliatory note, casting the Snowden
affair as but one issue among many.
Putin puts condition on asylumclaim: Cease publishing
SUSAN WALSH/AP
James Clapper, national intelligence chief,
told senators in March that the N.S.A. did
not collect data on millions of Americans.
We all spy, but the difference
here is the scale.
INTERNATIONAL HERALD TRIBUNE 4 | TUESDAY, JULY 2, 2013
. . . .
world news europe africa americas
BRI EFLY
Europe
I STANBUL
20,000 take to the streets
to demand gay rights
Not long after a security crackdown
smothered the antigovernment
protests that convulsed Turkey for
weeks, thousands of people have taken
to the streets of Istanbul again, this
time for a march to demand better
treatment and equal rights for lesbian,
gay, bisexual and transgender people.
When the first gay rights parade was
organized here in 2003, only a few
dozen people dared to take part. But on
Sunday, at least 20,000 people joined the
march, many of themholding rainbow
flags and chanting slogans denouncing
government policies that discriminate
based on sexual orientation.
In 2002, before he took office, Prime
Minister Recep Tayyip Erdogan prom-
ised greater legal protections for mem-
bers of the L.G.B.T. community, but in
March he called homosexuality a
sexual preference that contradicted
Islam, according to a report in the
newspaper Hurriyet. We were hopeful
back then, said Yildiz, a cross-dresser
who attended the march Sunday hold-
ing a rainbowumbrella. But nowwe
receive bad treatment fromthe police
and the judiciary on made-up grounds.
ROME
Pope to visit Lampedusa
to support immigrants
Pope Francis has chosen the southern
Italian island of Lampedusa for his first
trip outside Rome, to showsolidarity
with tens of thousands of refugees who
each year brave a perilous journey
there in flimsy boats, the Vatican said
Monday.
The island, Italys southernmost
point, is the conduit for mostly African
immigrants fleeing conflict or economic
hardship in order to enter the European
Union. The Vatican said Francis was
profoundly touched by the flood of
immigration and would throwa wreath
of flowers into the sea in memory of the
many who have drowned in waters off
the island during the visit on July 8.
Aholding center on the island built to
hold 380 people has long been over-
whelmed. The islands predicament has
become a symbol for those who see im-
migration as out of control. (REUTERS)
Tanzanians warn of rising political tension
DAR ES SALAAM, TANZANIA
BY NICHOLAS KULISH
As one of the leaders of an acrimonious
strike by doctors in Tanzania, Dr. Steph-
en Ulimboka was not entirely surprised
when a group of armed men appeared,
unannounced, at a meeting and arres-
ted him. But when he saw that the car
they were forcing him into had no li-
cense plates, fear truly hit him.
Youre going to pay for what youve
been doing, Dr. Ulimboka recalled one
of the men saying. You can start pray-
ingto your Godbecause there is no turn-
ing back.
They beat him for hours on that June
night last year, first with their fists, then
with metal rods. They pulled the nails
frombothof his bigtoes. As he layonthe
ground, he heard them discussing the
best way to kill him. He was unsure
whether he would live till daybreak.
Tanzania has a reputation abroad as
an island of stability in the often-chaotic
region of East Africa. The country has
been rewarded with praise and money
frominternational donors, including the
United States, which last year gave the
country more than $480 million.
President Barack Obama arrived
here Monday to visit a country where
human rights groups and the largest op-
position party say episodes of intimida-
tion and suppression of political oppo-
nents are growing. The international
community believes there is peace in
Tanzania, said Willibrod Slaa, the sec-
retary general of the opposition party,
Chadema. There is fear, not peace.
Journalists have been attacked and in
at least one instance killed while work-
ing. Last July, the government banned
an independent weekly newspaper,
Mwanahalisi, which had been reporting
on Dr. Ulimbokas kidnapping, linking
the crime to the government. President
Jakaya Kikwete denied any connection.
The political violence reached a new,
unexpected level last month, when a
hand grenade was thrown at a rally or-
ganized by Chadema in the northern
city of Arusha, killing four people. No
suspect has been identified, and the in-
vestigation is continuing.
At the party offices in Dar es Salaam
the other day, officials placed a silver
laptop on a table and showed a video
fromthe rally in Arusha.
In the footage, party leaders gave
speeches fromatop a truck with built-in
speakers. Afterward, they descended
into the crowd and began collecting
donations. A blast sent people scatter-
ing. A handful of wounded and dead
were frantically gathered and carried to
the bed of a pickup truck that took them
to receive medical treatment, leaving
behind a blacktop slick with blood.
It is intimidation, Mr. Slaa said.
The people will be afraid to go to the
polling stations, and the active ones will
have been eliminated.
Chadema officials have publicly said
that the man responsible was either
working with, or protected by, the po-
lice. They say the party will produce a
video proving their charge, but only
after an independent commission has
been named to investigate.
Paul A. M. Chagonja, commissioner of
police for operations, called the allega-
tions frivolous and unfounded and
said the party was obligated to furnish
law enforcement with any evidence in
its possession.
Tanzania, home to Mount Kiliman-
jaro, is a popular tourist destination for
safaris in the Serengeti. The nation has
been lauded for its ethnic cohesion,
rising above the kind of tribal violence
that rocked Kenya after that countrys
elections in 2007. Although a church
bombing in May, also in Arusha, raised
concerns that religious tensions could
rise, Tanzania is relatively free of sec-
tarian strife. That is one reason Mr.
Obama scheduled a visit here.
On Monday, Mr. Obama was greeted
by a sea of ecstatic Tanzanians, who
poured out of their houses and busi-
nesses along the main streets of Dar Es
Salaam.
On his way from the airport to the
state house for a meeting with Mr.
Kikwete, people lined nearly every inch
of the streets as the motorcade made
the 20-minute journey. The crowds, a
dozen rows deep in some places, roared
with approval as Mr. Obama passed.
The president said at a news confer-
ence that he sought a new U.S. relation-
ship with Africa.
We are looking at a newmodel thats
based not just on aid and assistance, but
on trade and partnership, Mr. Obama
said, according to The Associated Press.
Ultimately, the goal here is for Africa
to build Africa for Africans, he said.
And our job is to be a partner in that
process.
Tanzania is the final stop of Mr.
Obamas weeklong African visit. White
House officials also said Monday that
Mr. Obama would be joined by his pre-
decessor, George W. Bush, at a wreath-
laying event Tuesday morning at the
site of the 1998 coordinated bombings of
U.S. Embassies in Tanzania and Kenya.
Tenpeople were killedat the embassyin
Dar es Salaam.
The Tanzanian government has es-
sentially remained in the hands of the
same party since independence half a
century ago. Tanzania held its first mul-
tiparty elections in 1995, but the govern-
ing party, Chama cha Mapinduzi, or
Party of the Revolution in Swahili, has
won the national elections each time
since.
Analysts say the very real prospect
that voters will choose another party in
the next election, in 2015, has rattled
some members of the government, par-
ticularly those who are afraid that a new
party in power could mean aggressive
investigations and prosecutions.
Abdulrahman Kinana, secretary gen-
eral of the governing party, said it was
prepared to accept a defeat at the ballot
box. We were always ready to transfer
power if the people decide, he said,
adding that the party had won the coun-
trys free and fair elections by reach-
ing out more effectively to voters.
But the government needs to tell us
what happened to those people who
were either killed or attacked, Mr. Kin-
ana said. Most of these crimes have
not gotten an explanation.
The men who kidnapped and tortured
Dr. Ulimboka took himto a forest, where
hewasdumpedinaholeabout ameter, or
three feet, deep, his arms andlegs bound.
He laid as still as possible, hoping the
men would believe he was already dead.
He waited about half an hour after they
left before struggling to free his legs.
He walked toward the sound of a road,
his hands still boundbehindhis back, the
rope biting deeply into his wrists. There,
he found help and was taken to a police
station and later to a hospital. He had to
be flown to South Africa for treatment.
A year later, most of his injuries have
healed. He does not fear for himself at a
time when people are killed at public
gatherings.
People, Dr. Ulimboka said, can
just kill you anywhere.
Michael D. Shear contributed reporting.
DOUG MILLS/THE NEW YORK TIMES
Tanzanians lining the streets to greet President Barack Obama on Monday as his motorcade drove fromthe airport to Dar es Salaamfor his meeting with President Jakaya Kikwete.
The people will be afraid
to go to the polling stations,
and the active ones will have
been eliminated.
BRI EFLY
Americas
After same-sex ruling, couple
in Florida gets resident visa
An American man in Florida and his
husband, who is fromBulgaria, have
become the first same-sex married
couple to be approved for a permanent
resident visa, a milestone that comes
after the Supreme Court struck down a
federal lawagainst same-sex marriage
last week.
The notice of approval of a permanent
visa, known as a green card, was issued
by e-mail last Friday to Traian Popov, a
Bulgarian immigrant who lives with his
American spouse, Julian Marsh, in Fort
Lauderdale, Florida. The two were mar-
ried in NewYork last year.
The Supreme Courts decision has
had a significant impact in cases in-
volving United States citizens who are
seeking green cards for foreign spouses
of the same sex. The Defense of Mar-
riage Act, which defined marriage as a
union between a man and a woman,
had prohibited the federal government
fromrecognizing same-sex marriages
as the grounds for any visa.
SANTI AGO
Ex-president advances
in bid to return to power
Michelle Bachelet, who was the leader
of Chile from2006 to 2010, has won a
lopsided victory in the countrys first
national primary, making her the fa-
vorite to win back the presidency in
November.
Ms. Bachelet, the first woman to lead
Chile, won nearly three-quarters of the
vote Sunday for the nomination of the
center-left NewMajority coalition, eas-
ily defeating two rivals. The conserva-
tive Alliance for Chile coalition chose a
former economy minister, Pablo
Longueira, to oppose her.
Presidents of Chile are barred from
serving consecutive terms, but not from
serving more than once. If she wins,
Ms. Bachelet will be the first president
to return to office since the current Con-
stitution took force in 1981. (REUTERS)
RI O DE JANEI RO
Protest turns violent outside stadium
Security forces fired rubber bullets and
tear gas at protesters to break up a
demonstration near the Maracan sta-
dium, while Brazils soccer team
played against Spain inside the arena.
After a demonstration by thousands of
people on Sunday afternoon, a small
group of protesters threwrocks at po-
lice officers. At least six people were in-
jured, Brazilian news media reported.
Helicopters and a DC-10 jet, dropping
slurry, were also aiding the effort.
Steve Skurja, a spokesman for the
Yavapai County Sheriffs Office, said of-
ficials had decided to allowmany homes
in the area to burn because the crews
were having such a hard time; The Ari-
zona Republic reported that about half
of the towns 500 homes were expected
to be destroyed.
The fire was sparked Friday after-
noon by a lightning strike, the authorit-
ies said. They said twisting winds, com-
bined with a 10-year drought and dry,
thick brush in the area, had helped the
blaze spread.
BrianKlimowski, the meteorologist in
charge of the National Weather Service
office in Flagstaff, Arizona, said the
wildfire area experienced a sudden in-
crease and shift in wind around the time
the firefighters were overrun. It is not
known how powerful the winds were,
but theywere enoughto cause the fire to
grow in size from 200 acres to about
2,000 in the matter of hours Sunday.
According to government figures, the
deaths on Sunday represented the
largest number of firefighters killed in
one wildfire since a 1933 blaze in Califor-
nia that killed 25, and the largest loss of
firefighters since 341 and two paramed-
ics died in the Sept. 11, 2001, terrorist at-
tacks on NewYork City.
The crewkilled in the blaze had spent
recent weeks fighting fires in NewMex-
ico and Prescott before being called to
Yarnell. They entered the smoky wil-
derness over the weekend with back-
packs, chainsaws and other heavy gear
to remove brush and trees as a heat
wave across the Southwest sent tem-
peratures into the triple digits.
We grieve for the family. We grieve
for the department. We grieve for the
city, said Dan Fraijo, the Prescott fire
chief. Were devastated. We just lost 19
of the finest people youll ever meet.
As a last-ditch effort at survival,
members are trained to dig into the
ground and cover themselves with their
fire-resistant shelters, Chief Fraijo said.
Its an extreme measure thats
taken under the absolute worst condi-
tions, he said.
Earlier on Sunday, the fire was travel-
ing north, away from the small commu-
nityof Yarnell, 4,800 feet, or 1,463 meters,
upa mountainbetweenWickenburgand
Prescott, in central Arizona. Some of the
650 residents there had left to go to
neighboring Peeples Valley, where an
evacuation order was in place, to help
people pack up and leave their homes.
Others stayed behind, watching the
parched bush burn in the distance or,
like Nina Bill Overmyer, 66, taking a
nap. Suddenly, the wind shifted, and the
flames changed direction, rushing
through the forest straight toward Yar-
nell. Ms. Overmyers husband, Chuck,
woke her up, and they picked up what
they could. He took his motorcycle. She
took their Dodge truck, pulling the flat-
bed trailer bearing their prized Ford hot
rod. By the time they came back to get
their dogs, the blaze was roaring just
above them, rolling down the mountain
and swallowing everything around: the
towns library, community center, diner.
Oh, God, she said. Its all gone.
Nearby, Adria Shayne, 52, grabbed
only her parrot, her dog and her cat. Her
daughter-in-law, Cynthia Somers, said
there was no time to think of what to
take and what to leave behind It was
get up and go. (IHT, AP)
PRESCOTT, ARIZONA
FROMNEWS REPORTS
A wind-driven wildfire continued to
rage out of control in central Arizona on
Monday as crews battling the blaze
copedwithboththe growing fire andthe
deaths of 19 colleagues the day before.
The Yarnell Hill Fire, near the town of
Yarnell, about 80 miles, or nearly 130 ki-
lometers, northwest of Phoenix, has
grown to some 8,374 acres, or 3,390 hec-
tares. Fire officials said they expected a
difficult day with shifting winds, similar
to those that led to the deaths of the fire-
fighters on Sunday.
Of the firefighters killed in the blaze,
18 were members of the Granite Moun-
tain Hotshots, a specialist team of wild-
fire fighters based in Prescott, Mike
Reichling, an Arizona Forestry Division
spokesman, said Monday. Their names
have not yet been released. The other
firefighter was not part of the unit, Mr.
Reichling said.
It was unclear exactly how the fire-
fighters became trapped. Clay Templin
of the Tonto National Forest said Mon-
day that the crew and its commanders
were following safety protocols, but that
it appeared the fires erratic nature
simply overwhelmed them.
Mr. Reichling said the crew members
had deployed their foil-lined shelters,
designed for use in only the direst of
emergencies. One member of the hot-
shot crew survived because he was
moving the units truck whenthe flames
roared over the men, he said.
This is as dark a day as I canremem-
ber, Governor Jan Brewer of Arizona
said in a statement on Sunday.
It may be days or longer before an
investigation reveals how this tragedy
occurred, but the essence we already
knowin our hearts: fighting fires is dan-
gerous work, she said. When a
tragedy like this strikes, all we can do is
offer our eternal gratitude to the fallen,
and prayers for the families and friends
left behind. God bless themall.
President Barack Obama issued a
statement on Monday as he was ending
a visit to South Africa and flying to Tan-
zania. Yesterday, 19 firefighters were
killed in the line of duty while fighting a
wildfire outside Yarnell, Arizona. They
were heroes highly skilled profes-
sionals who, like so many across our
country do every day, selflessly put
themselves in harms way to protect the
lives and property of fellow citizens
they would never meet.
As of Mondaymorning, withtempera-
tures in the area already higher than 90
degrees Fahrenheit (32 Celsius), the
blaze was zero percent controlled,
Mr. Reichling said. The weather has
caused havoc, he said.
Morethan200 firefighters andsupport
personnel were assigned to the wildfire
as of Monday morning. They included 18
hotshot crews from around the country.
As Obama visits country
hailed as a beacon, some
see growing intimidation
19 firefighters die as blaze in Arizona roars out of control
TOM STORY/THE ARIZONA REPUBLIC, VIA ASSOCIATED PRESS
The Yarnell Hill wildfire has burned more than 8,000 acres. A specialized hotshot firefighting crewwas overrun by flames on Sunday.
We grieve for the family.
We grieve for the department.
We grieve for the city.
TUESDAY, JULY 2, 2013 | 5 THE GLOBAL EDITION OF THE NEW YORK TIMES
. . . .
asia-pacific world news
CORRECTI ONS
An article in June 22-23 editions about
Niijima, Japan, a surfing destination,
misstated the location of the beach
where a number of international surfing
competitions are held. Habushi-ura is
on the east coast of the island, not on the
west coast.
An article in Saturday-Sunday edi-
tions about the investigation of the Vat-
ican Bank misstated Msgr. Nunzio
Scaranos employer before he entered
the priesthood. Although he did work
for a bank that was bought by Deutsche
Bank in 1986, his employment there
predated the sale, so he was never an
employee of Deutsche Bank.
BRI EFLY
Asia
SRI NAGAR, KASHMI R
2 are killed in gun battle
in Indian-controlled Kashmir
Apolice officer and a militant were
killed Monday in a gun battle in Indian-
controlled Kashmir, as shops and busi-
nesses remained closed in the disputed
region to protest the killing of two
people by the army, an official said.
Aparamilitary spokesman, Kishore
Prasad, said soldiers and the police had
cordoned off Mandoora village in south-
ern Kashmir on Monday, leading to an
exchange of gunfire with rebels
trapped in a building. Two soldiers
were wounded in the gun battle.
In the main city of Srinagar, schools
were shut and shops closed for a strike
called by separatists to protest the
killing of the two by the army on Sunday.
The killings led to large anti-India rallies
and clashes that left five government
troops injured on Sunday. (AP)
I SLAMABAD
Death toll in Pakistan rises
to 52 after weekend attacks
Police officials said Monday that the
death toll fromseveral weekend bomb-
ings in Pakistan had climbed to 52 after
three victims died overnight fromtheir
wounds.
In the city of Quetta, the capital of Bal-
uchistan Province and the center of a vi-
olent campaign by Sunni militants
against the Shiite Hazara minority, a sui-
cide bomber detonated explosives near
a mosque late on Sunday, killing 28. Two
people wounded in that attack died Mon-
day, said a senior police officer, Fayaz
Sumbal. The militant group Lashkar-e-
Jhangvi, which has carried out many at-
tacks against Shiites in recent years,
took responsibility. In the northwestern
city of Peshawar, one person wounded in
an attack on a paramilitary convoy Sun-
day died in a hospital. (IHT, AP)
Helping ethnic Koreans combat the stigma of autism
NEW YORK
BY AL BAKER
Autism, or the fear of it, chased one
Korean mother from her church in the
borough of Queens here. I very care-
fullytoldthe mom: I thinkyour childis a
little different. Why dont you take the
test for autism? said the Rev. Joy Lee
of theKoreanPresbyterianChurchinthe
Flushing area of the borough. She told
me, Oh no, my child will be O.K. Then
she quit. After that, she did not pick up
the phone.
It crushed another Korean mother
twice. First, she said, when her son re-
ceived the diagnosis, and again when
friends saw it as a sign that she herself
was sick. To cure him, they said, she
needed psychotherapy.
Sun Young Ko, of the Forest Hills sec-
tion of Queens, whose 8-year-old son,
Jaewoo Kwak, was given a diagnosis of
autism 18 months ago, said her own
mother refused to discuss her grandson
with relatives or friends. Shes kind of
hiding, Ms. Ko said.
Raising an autistic child is hard
enough, let alone raising one ina culture
in which the stigma surrounding autism
runs high. Now, inspired by a 2011 study
of a South Korean city that found rela-
tively high rates of autism, a leading ad-
vocacy group is teaming with churches,
doctors, schools andnews organizations
in Flushing, trying gingerly to bring
Koreanparents aroundtothe ideathat if
there is something unusual about their
child, concealing it and avoiding help
are absolutely the wrong things to do.
More so than other populations,
Korean-Americans reallymeasure their
own self-worth, and the worth of the
family, in terms of what the child is able
to achieve and what the child means to
the family, said Roy Richard Grinker, a
professor of anthropology at George
Washington University and the senior
author of the South Korea study.
If I have a child with autism, there is
no effect on our house value, on the abil-
ity to make friends and on an ability to
get promotedat work, saidMr. Grinker,
who wrote Unstrange Minds: Remap-
ping the World of Autism about life
with his autistic daughter, Isabel, now
21. Alot of Korean families fear that.
It is a crucial moment for autism. The
number of children who receive a diag-
nosis of autismhas beenrisingfor years,
without any consensus about why, other
than increased awareness. At the same
time, autism itself is being redefined:
The newest edition of the American
manual for mental disorders, released
weeks ago, collapsed some categories of
autism, including Asperger syndrome,
under the umbrellaof autismspectrum
disorder. Some experts have predicted
the change will lead to fewer diagnoses,
and hence cuts in public spending on
therapy and special education.
In New York, the number of public
school students classified as having aut-
ismthis year, 10,199, or roughly 1 percent
of enrolled students, is up 50 percent
from four years ago, according to the
citys EducationDepartment. Diagnoses
amongAsianstudents have alsojumped.
But while they make up 16 percent of the
school system, they account for only 8
percent of those with autismdiagnoses.
The South Korea study, which was fi-
nanced by AutismSpeaks, the same ad-
vocacy group behind the Queens effort,
screened 55,000 students in the Ilsan
district of the city of Goyang. Research-
ers found that 2 percent of them were
autistic, but that two-thirds of those stu-
dents had not previously received a di-
agnosis or any psychological or special
education services. The prevalence was
surprising, because it was nearly twice
the rate reported in the United States,
according to the Centers for Disease
Control and Prevention.
The Korea study attributed the large
number of undiagnosed cases to the
stigma of autism. In interviews, some-
times throughtranslators, Koreanmoth-
ers of autistic children in the New York
area opened up about their experiences.
Several said the diagnosis strained
their marriages. One, Mee Hee Kim,
said it contributed to her divorce. The
mothers also described the subtle ways
that they and their children were shut
out of normal social or familial encoun-
ters, a problem parents from many cul-
tures report, or howthey isolated them-
selves, retreating from invitations to
dinner parties or play dates.
Some also worried that their autistic
childrens siblings would struggle to
find spouses in the Korean community.
Ms. Ko, 42, the mother of Jaewoo, said
the sadness led her to contemplate sui-
cide, though she never tried it.
Often, a diagnosis leads to guilt.
In my experience, so many people
ask me: Did you do something wrong?
Do you guys fight each other in front of
the kids? said Anna Im, the mother of
a 14-year-old autistic boy. Koreans be-
lieve these little things affect the child
and they become autistic.
The outreach effort in the Flushing
area, where the bulk of New Yorks
90,000 Korean residents live, began with
a round of interviews in the community
andanadaptationof autismliteraturefor
Korean readers. In late April, the local
Korean news media were briefed on the
project. Then the translated autism ma-
terials were spread to 60 pediatricians,
preschools and early childhood centers.
In a year or so, researchers will mea-
sure whether several early childhood
agencies that contract with the city are
seeing spikes in requests for help from
Koreans grappling with autism.
We are trying to build a model, for
outreach and facilitation, that would
support immigrant families, minority
families, to access services available
fromschool systems and fromcities and
states, said Andy Shih, who is man-
aging the initiative at AutismSpeaks.
As diagnoses have become more com-
mon, some early intervention providers
have taken advantage of the growth in
public spending, and lax oversight, by
billing for services that were not needed
or never provided.
Unscrupulous providers are not the
only potential pitfall. Young Seh Bae, 48,
who leads a committee of the Korean
American Behavioral Health Associ-
ation and is the mother of a 16-year-old
boy with autism, said she worried that a
focus on Koreans, in both the South Ko-
rea study and the Flushing effort, could
exacerbate stereotypes.
When you look at the different cul-
tures, and compare the disabilities is-
sues, why do you have to just look at Ko-
rea? she said. Why dont you look at
certainparts of the UnitedStates?What
about Oregon? Or Oklahoma?
And though the study in South Korea
was rigorous, Winston Chung, an as-
sistant professor of psychiatry at the
Geisel School of Medicine at Dartmouth,
said it should be viewed carefully be-
cause the researchers used tools de-
signed by a Western culture to measure
children in an Eastern one. Typical be-
haviors in a Confucian society, where
the norms for eye contact, gesturing so-
cial reciprocity and expressing oneself
are profoundly different, and where
the skill of nunchi measuring
someones mood and desires without
speaking is valued, could be miscon-
strued as autistic in some cases, he said.
In Korean culture, harmony is prior-
itized, and some kids growing up with
this social pressure might be better off
keeping their heads down and mouths
shut, and these tendencies could be mis-
taken for autistic traits from a Western
perspective, said Mr. Chung, whose
parents were born and live in Korea.
NIKO J. KALLIANIOTIS FOR THE NEW YORK TIMES
Sun Young Kos 8-year-old son, Jaewoo Kwak, was given a diagnosis of autism 18 months ago. She said her own mother refused to discuss her grandson with relatives or friends.
HONG KONG
BY CHRIS BUCKLEY
The police in the volatile far-western
Chinese region of Xinjiang said that a re-
cent deadlyconfrontationwithmembers
of the Uighur ethnic minority was set off
byreligious extremists who attackedthe
police after one of their own was arres-
ted, the state media reported.
Chinas Communist Party leadership
has demanded an unyielding security
response in Xinjiang after two violent
clashes withUighurs onWednesdayand
Friday. Those episodes have kindled
fears of a repeat of the events of July 5,
2009, whenprotests inXinjiangs region-
al capital, Urumqi, grew into street at-
tacks that left nearly 200 residents dead,
many of them Han Chinese, by far the
countrys biggest ethnic group.
Over the weekend, the government
mountedanintimidatingdisplayof force
in Urumqi, where convoys of Peoples
Armed Police patrolled the streets. The
report that the police had swiftly identi-
fied all the suspects involved in the vio-
lence Wednesday also appeared to be
part of that showof strength.
Advocates of Uighur self-determina-
tion and global human rights groups,
however, say Chinas heavy-handed se-
curity policies in Xinjiang are exacerbat-
ing tensions with Uighurs, a Turkic-
speaking people, nearly all of whom ad-
here to Islam. Many of those critics are
also likely to be skeptical of the govern-
ment account of thebloodshedthat broke
out in Lukqun, a town in Turpan Prefec-
ture, which left a total of 35 people dead.
According to that account, published
Sunday by Xinhua, the state-run news
agency, the attack was mounted by a
group of religious extremists who in
February formed a violent terrorist
gang. The report did not identify their
religion, although their Uighur names
left scant doubt they were Muslims.
Fifteen members of the group at-
tacked the Lukqun town police station,
government offices and shops after the
police arrested one of the members,
Xinhua reported. Their attack left 24
people dead, 16 of themUighur.
Theyburnedanddestroyedvehicles,
and wielded knives, madly slashing and
killing police and innocent members of
the public, the Xinhua report said. The
police shot and killed 11 of the rioters,
and four were wounded and captured,
according to the report. On Sunday, the
police caught the last gang member who
was on the run, the report said.
China says
Uighurs are
to blame for
latest clash
Parents are told, gingerly,
that avoiding help is absolutely
the wrong thing to do.
Newpremier
in Australia
adds women
to cabinet
SYDNEY
BY MATT SIEGEL
Prime Minister Kevin Rudd, who de-
posed Australias first female prime
minister in a party coup last week, an-
nounced a new cabinet on Monday that
includes the largest number of women
in the countrys history.
Fears of a landslide loss in national
elections scheduled for September mo-
tivated lawmakers in Mr. Rudds gov-
erning Labor Party to reinstate him
Wednesday, bringing to an end the trou-
bled three-year tenure of Julia Gillard,
who had replaced Mr. Rudd as party
leader and prime minister in 2010.
The appointments increase the num-
ber of women in cabinet to 11 out of a
total of 29 positions, including 6 minis-
ters and 5 junior ministers.
Mr. Rudd dismissed speculation that
he was pandering to female voters who
may have been bothered by Ms. Gil-
lards dismissal.
This will be the largest number of
women in the Australian cabinet in his-
tory, and the same for the ministry at
large, Mr. Rudd said on the Channel
Seven television network on Monday
morning. These are women who are
strong, professional, highly experi-
enced and they are there exclusively on
their merit.
Senator Jacinta Collins and two mem-
bers of the House of Representatives,
Julie Collins and Catherine King, joined
the cabinet, whose other female mem-
bers are Senator Penny Wong and
Jenny Macklin and Tanya Plibersek of
the House.
Years of infighting over the leader-
ship have left the Labor Party deeply di-
vided, and more than a half-dozen min-
isters have resigned since Mr. Rudds
return to office. That exodus has left a
dearth of experienced lawmakers in the
leadership less than three months be-
fore what now promises to be a closely
contested election.
Tony Abbott, the leader of the opposi-
tion Liberal-National coalition, dis-
missed the new members as inexperi-
enced. The newministry isnt even the
Bteam, its the Cteam, he saidina tele-
vised statement.
Ms. Gillard, who announced her re-
tirement from politics after being oust-
ed by Mr. Rudd, had long struggled to
assert herself as prime minister, fight-
ing low poll numbers while enduring
withering attacks from the opposition
as well as dissent within her own party.
The International Herald Tribunes luxury conference
series is the premier annual forumfor business
and creative leaders fromacross the global luxury
goods industry.
Hosted by the IHTs world renowned Fashion Editor, Suzy Menkes,
the conference regularly attracts the highest level of keynote
speakers and an annual international audience of over 500
delegates from more than 35 countries.
Singapore, November 21 - 22, 2013
SPEAKERS INCLUDE
Register by September 13 and save 100 at
IHTLuxury.com
or contact Amber Smart, asmart@iht.com, +44 (0)20 7061 3524
To sponsor, contact Brenda Hagerty, bhagarty@iht.com, +44 (0)20 7061 3513
@IHTLuxury #IHTLux
Anna Sui
Founder, Anna Sui
Stephen Webster
Creative Director, Stephen
Webster & Garrard
Anya Hindmarch
Founder, Anya Hindmarch
Livia Firth
Creative Director, Eco Age
Bryanboy
Blogger, bryanboy.com
AndrewKeith
President, Lane Crawford
and Joyce
INTERNATIONAL HERALD TRIBUNE 6 | TUESDAY, JULY 2, 2013
. . . .
Views
editorial opinion
International Herald Tribune Immeuble le Lavoisier, 4, place des Vosges, 92400 Courbevoie France. POSTAL ADDRESS: CS 10001, 92052 Paris La Dfense Cedex. Tel: +33 1 41 43 93 00
E-Mail: iht@iht.com Internet address: global.nytimes.com Subscriptions: subs@iht.com Tel: +33 1 41 43 93 61 Classified: +33 1 41 43 93 85
Regional Office, Asia-Pacific: #1201, 191 Java Road, Hong Kong Tel. +852 2922 1188 Fax: +852 2922 1190 The Americas: Regional Office, 620 Eighth Avenue, New York, N.Y. 10018 Advertising Tel. +1 212 556 7707 Fax: +1 212 556 7706, Circulation Tel. (toll free) +1 800 882 2884 or +1 818 487 4540 Fax: +1 818 487 4550 ihtus@espcomp.com
U.K.: Advertising Office, 1 New Oxford Street, London WC1A 1NUTel. +44 20 7061 3500 Fax: +44 20 7061 3529
S.A.S. au capital de 240.000 . RCS Nanterre B 732021126. Commission Paritaire No. 0513 C 83099 2012, International Herald Tribune. All rights reserved. ISSN: 0294-8052. Material submitted for publication may be transferred to electronic databases. The full text of the Contributor Policy appears on the Internet at: http://www.ihtinfo.com/press/contributorpolicy.html
International Herald Tribune
THE GLOBAL EDITION OF THE NEW YORK TIMES
STEPHEN DUNBAR-JOHNSON Publisher
ALISON SMALE Executive Editor
DAVE SMITH Managing Editor
PHILIP McCLELLAN Deputy Managing Editor
URSULA LIU Deputy Managing Editor
KIRK KRAEUTLER Deputy Managing Editor
KATHERINE KNORR Assistant Managing Editor
TIM RACE Assistant Managing Editor
RICHARD BERRY Editor, Continuous News
SERGE SCHMEMANN Editor of the Editorial Page
PHILIPPE MONTJOLIN Senior Vice President, Operations
ACHILLES TSALTAS Senior Vice President, Innovation and Conferences
CHANTAL BONETTI Vice President, Human Resources
JEAN-CHRISTOPHE DEMARTA Vice President, International Advertising
CHARLOTTE GORDON Vice President, Marketing and Strategy
PATRICE MONTI Vice President, Circulation
RANDY WEDDLE Managing Director, Asia-Pacific
SUZANNE YVERNS Chief Financial Officer
Stephen Dunbar-Johnson, Prsident et Directeur de la Publication
The U.S.
court ruling
sends a
signal of
encourage-
ment to the
worlds
sexual
minorities.
KERRYS QUEST
There is a sense of fatalismin Washington about Secretary of
State John Kerrys quest to revive Israeli-Palestinian peace
talks. Many experts have concluded that the conditions for
peace dont exist and are unlikely to exist soon. So far, White
House officials have not begrudged Mr. Kerrys investment of
time and energy in the initiative, but there is little expectation
that President Obama, bogged down with so many other pri-
orities, will get very involved unless real progress emerges.
Still, Mr. Kerry keeps doggedly plowing forward. Despite
the skeptics, this issue is of such importance that he is right to
stay focused on it, at least until it becomes clear that neither
side is willing to seriously engage. And while his trip to the
region last week his fifth produced no breakthrough, he
said he had made progress and would return again soon.
On Thursday, he met with Prime Minister Benjamin Netan-
yahu of Israel, then drove to Amman to confer with the Pales-
tinian president, Mahmoud Abbas, on Friday. He later flewby
helicopter back to Jerusalemfor another meeting with Mr. Net-
anyahu, then one with President Shimon Peres of Israel. On
Saturday and Sunday, he shuttled between the leaders again.
Whether there is any substantive narrowing of differences
between the two sides is unknown. Mr. Kerrys determina-
tion to maintain secrecy is frustrating to anyone following his
mission but also tactical, since unveiling details prematurely
is more likely to back Israelis and Palestinians into opposite
corners. The JerusalemPost reported on Friday that Mr.
Kerry proposed a series of meetings between Mr. Netanyahu
and Mr. Abbas. The newspaper said Mr. Netanyahu accepted
the plan and Mr. Abbas was being pressured to do the same.
The public signals fromboth sides have been confusing.
There is division in Israels conservative government, where
hard-liners have tried to undermine Mr. Kerrys initiative by
advocating more West Bank settlements, while moderates
have endorsed a two-state solution. The Israeli news site
Haaretz.comreported that Mr. Netanyahu has shifted and
is nowserious about the peace process and a two-state solu-
tion. One can only hope that is true.
It does not help that the Palestinians are more disorganized
than ever since their highly competent prime minister, Salam
Fayyad, was ousted and replaced by someone who resigned a
fewweeks later. Mr. Abbas has insisted that Israel halt all set-
tlement building before negotiations could resume and also
wanted some Palestinian prisoners released fromIsraeli
jails. Israels government has not initiated newsettlements
since it was formed in March; even so, it has moved forward
on 69 previously approved apartments in East Jerusalem.
There have been no direct Israeli-Palestinian peace talks
since 2010. Mr. Kerry has made clear he wants to make head-
way well before September, when the U.N. General Assembly
will debate the Middle East. If that does not happen, there may
come a point when Mr. Kerry and President Obama will have
to decide whether it makes sense to invest such energy in this
project without a commitment by Israel and the Palestinians.
Aglobal message on gay marriage
The revolt of the rising class
The middle
class in
Turkey is
fed up with
Erdogan.
But has he
really got-
ten the
message?
Manil Suri
BALTIMORE The Supreme Court de-
cision to strike down core provisions of
the Defense of Marriage Act is a stride
toward greater equality in the United
States. But it is also a shift that will re-
verberate far beyond our shores. Amer-
ica has always been a beacon for those
unable to live a life of liberty in their
homelands, and the ruling sends a sig-
nal of encouragement to such individu-
als, and to their governments, about
what we consider morally acceptable.
In 1979, as I waited in line to enter the
United States for the first time, I was
fairly certain I was gay. When I was
growing up in Mumbai, homosexuality
was invisible I hadnt met a single
person like myself in my 20 years there.
America, to me, offered a ray of hope
through my despair: Id detected in-
controvertible evidence of gay life in its
magazines and films.
NowI stood at the threshold, being
asked by the uniformed gatekeeper to
state my business. I handed over my
I-20 form: proof Id come to pursue an
advanced mathematics degree and
nothing else. Then I was through, into
the promised land.
Gazing back at my almost three and a
half decades here, I see a life filled with
opportunity and freedom. Yes, there
were years of furtiveness, of sleepless
nights wondering if Id be sent back.
But also the time and space I needed to
explore and ease into my identity, the
ability to live openly with the person I
love for 23 years (and counting). And
with this ruling comes the affirmation
of what first attracted me to this coun-
try: its promise of fairness and equality.
Howwould my life have played out
had I stayed in India? Would I have used
marriage as a cover, as a majority of In-
dian homosexuals still do? Or would I
have helped usher in the nascent queer
scene, more visible since the High Court
for the State of Delhi struck down anti-
sodomy laws in 2009? The Indian Su-
preme Court will soon decide on the Del-
hi ruling the kind of situation where
the American ruling could have an inter-
national impact. While the Indian judi-
ciary is fiercely independent, the fact re-
mains that America carries enormous
moral and cultural clout in the world.
Several nations considering the re-
cognition of same-sex unions (from
Bolivia to Vietnam) will receive this
amicus curiae signal. Homophobic
states like Nigeria will be served a fur-
ther reminder of howradically they di-
verge fromour principles of fairness.
Anumber of anti-homosexual stat-
utes that exist today, including those in
India, derive fromthe same source:
English common law. This illustrates
the tremendous worldwide influence a
single legal precept can have.
America is not the first to propose an
alternative precept, reversing centu-
ries of such discrimination. But it has
worked hard to project its image of sup-
porting freedom, and its voice will carry
the strongest. DOMAs repudiation will
burnish this image, and the effects will
be felt by sexual minorities growing up
alone and in despair all over the globe.
MANIL SURI, a mathematics professor at
the University of Maryland, Baltimore
County, is the author, most recently, of
the novel The City of Devi.
Bill
Keller
ISTANBUL In the upscale Istanbul sub-
urb of Bebek, at 9 p.m. sharp, the diners
began drumming on the tables or tap-
ping their wineglasses with forks. The
traffic passing along the Bosporus
chimed in with honking horns and
flashing headlights. It was a genteel
symphony of solidarity with the pro-
testers who a fewdays earlier were
confronting fire hoses and tear gas in
the heart of the city and elsewhere
around Turkey.
Those street battles that caught our
attention this summer have mostly
been policed into submission, and the
worlds cameras have moved on, but
the afterlife is interesting.
What is happening in Turkey is not
Les Miserables, or the Arab Spring.
It is not an uprising born in despera-
tion. It is the latest in a series of revolts
arising fromthe middle class the ur-
ban, educated haves who are in some
ways the principal beneficiaries of the
regimes they nowreject.
We sawearly versions of it in China
in 1989, Venezuela in 2002. We sawit in
Iran in 2009, when the cosmopolitan
crowds thronged in protest against
theocratic hard-liners. We sawit in
Russia in 2011, when legions of 30-
somethings spilled out of their office cu-
bicles, chanting their scorn for the high-
handed rule of Vladimir Putin. While
Turkey was still percolating, the dis-
content bubbled up in Brazil, where yet
another ruling party seems to be a vic-
timof its own success.
The vanguard in each case is mostly
young, students or relative new-
comers to the white-collar work force
who have outgrown the fearful con-
formity of their parents generation.
With their economic wants more or
less satisfied, they nowcrave a voice,
and respect. In this social-media cen-
tury, they are mobilized largely by
Facebook and Twitter, networks of
tweeps circumventing an intimidated
mainstreampress.
The igniting grievances vary. Here in
Istanbul it was a plan to build a mosque
and other developments on a patch of
the citys diminishing green space. In
Brazil it was bus fares. By the time the
protests hit critical mass, they are
about something bigger and more in-
choate: dignity, the perquisites of cit-
izenship, the obligations of power.
Because these protesters are by defi-
nition people with something to lose
and because the autocrats knowit
the uprisings are eventually beaten in-
to submission, at least for the short
term. The authorities kid themselves
that they have solved the problem. It
reminds me of that old pirate joke: The
floggings will continue until morale im-
proves.
But morale does not improve. There
is a newalienation, a newyearning, and
eventually this energy will find an out-
let. In some way, different in each coun-
try, the social contract will be adjusted.
The protesters in these middle-class
revolts tend to be political orphans,
leaderless, party-less, not particularly
ideological. To reach a newequilibrium,
either the rising class must get organ-
ized, or the ruling class must get the
message, or, ideally, both.
In China and Iran and Russia, where
the regimes are more established in
their ruthlessness, the discontented
may have a longer wait. But watch Tur-
key. HowTurkey, as a partner in NATO
and a bridge to the tumultuous Islamic
world, finds its newbalance has both
practical and symbolic significance for
the rest of the world.
The United States has long embraced
Prime Minister Recep Tayyip Erdogan
as the model of a modern Muslimre-
former. The Turkish prime minister,
during his decade in power, has tamed
the army of its coup habit, raised the
standard of living dramatically, offered
an olive branch to the separatist-
minded Kurds and demonstrated
alone in the region that Islamis com-
patible with both free elections and
broad prosperity. When civil war
sundered neighboring Syria, Erdogan
(braving the disapproval of an elector-
ate that tends to be more isolationist)
condemned the brutalities of President
Bashar al-Assad and hosted camps for
hundreds of thousands of Syrian
refugees. Both George W. Bush and
Barack Obama have doted on Erdogan.
The Islamist prime minister proudly
sent three of his four children to univer-
sities in the United
States.
By fostering eco-
nomic growth, by
keeping the army in
its barracks and
by not messing too
much with secular
lifestyles Erdogan
has won some
grudging support
fromthe worldly elite
that originally
viewed himand his more pious Islamic
following as a lurch back to the Otto-
man Empire.
Those days of urban skirmishing,
which began at the end of May with a
pointless and heavy-handed police
crackdown on a sit-in at the disputed
park, have opened many eyes to Er-
dogans intemperate and intolerant
side his tone-deafness, his tendency
to regard any criticismas a grave in-
sult, his conspiracy theories.
The surprise is that Erdogans dark-
er instincts came as a surprise to any-
one. Human rights organizations have
long lamented the fact that Turkey,
while it has a lively press, also has
more journalists in jail than any other
country on earth. If you troll through
the American diplomatic cables di-
vulged in the great WikiLeaks flood,
you find abundant talk of howErdogan
has sometimes used police and courts
as instruments of political control. But
he was a friend in an unfriendly region.
The American attitude was, to para-
phrase a line F.D.R. supposedly said of
another troubling ally: He may be a
thug, but hes our thug. And by regional
standards, he wasnt even that much of
a thug.
With the important exception of po-
lice brutality, Erdogans latest affronts
have been matters of speech and style
rather than action. He has talked of out-
lawing abortion (as have some promi-
nent American politicians), but he
hasnt tried to do it. He has described
Twitter as the worst menace to soci-
ety and suggested clamping down on
social media, but he seems unlikely to
have much success there even if he
tries. He has conjured a dark conspir-
acy of secular subversives, bankers
and Western media, but that is vintage
Erdogan, and vintage Turkey a coun-
try of intrigues that exemplifies the old
line: Even paranoids have enemies.
So the fact that the rising class has
chosen this moment to run out of pa-
tience seems to be Erdogans bad luck.
It may also be Turkeys good fortune.
One possible outcome is that those
unhappy with Erdogan will find an av-
enue into politics, and give Erdogan the
challenge he deserves. The Turkish
system(like the American, only more
so) favors incumbency and makes it
hard to formviable newparties, even if
Erdogans foes could agree on what
they are for. The most visible potential
moderate rival to Erdogan, Abdullah
Gul, who occupies the relatively power-
less presidency, has shown little will-
ingness to take on the prime minister.
But as Sinan Ulgen, the head of an
Istanbul think tank, points out, Er-
dogan is more vulnerable than the auto-
crats of Iran or Russia, who have oil
revenues to float themthrough a crisis.
Turkeys prosperity and in large
measure Erdogans popularity de-
pends on foreign investment and flocks
of tourists. The crackdown on protest-
ers dented Erdogans approval ratings;
more threatening to his tenure, it
spooked investors, emptied hotels and
sent the Turkish stock market into a
tailspin. Yes, the protesters have
something to lose, Ulgen told me. But
so does Erdogan.
In about a year his third termas
prime minister is up, and the rules
dont allowfor a fourth. He has been ex-
ploring options to prolong his time in
power, but they require popular sup-
port, and Erdogans hovers precari-
ously around 50 percent. So whether or
not he has the ability to temper his in-
temperance, he has the incentive. Aleg-
islator who is a moderate supporter of
Erdogan and was with himduring the
protests insists, He got the message.
Well see.
For the long-termstability of Turkey,
it would be good to have a robust polit-
ical opposition advocating a pluralism
that protects both the devout and the
secular. In the meantime, it may be
up to Erdogan to save Turkey from
himself.
Bhutan is no Shangri-La
Vidhyapati Mishra
DAMAK, NEPAL Before my family was
expelled fromBhutan, in 1992, I lived
with my parents and seven siblings in
the south of the country. This region is
the most fertile part of that tiny king-
domperched between Tibet and India,
a tapestry of mountains, plains and
alpine meadows. Our house sat in a
small village, on terraced land flourish-
ing with maize, millet and buckwheat, a
cardamomgarden, beehives and
enough pasture for cows, oxen, sheep
and buffaloes. That was the only home
we had known.
After tightening its citizenship laws
in the mid-1980s, Bhutan conducted a
census in the south and then proceeded
to cast out nearly 100,000 people
about one-sixth of its population, nearly
all of themof Nepalese origin, including
my family. It declared us illegal immi-
grants, even though many of us went
back several generations in Bhutan. It
hasnt let any of us move back.
The enormity of this exodus, one of
the worlds largest by proportion, given
the countrys small population, has
been overlooked by an international
community that is either indifferent or
beguiled by the government-sponsored
images of Bhutan as a serene Buddhist
Shangri-La, an image advanced by the
policy of gross national happiness,
coined by King Jigme Singye
Wangchuck in the 1970s.
Bhutan even helped inspire the
United Nations last year to declare
March 20 the International Day of Hap-
piness a cruel irony to those of us
who were made stateless by the king,
who was an absolute monarch when we
were expelled.
Many of our ancestors were recruited
fromNepal in the mid-19th century to
cultivate the arable land of southern
Bhutan. We are known as Lhotshampa
literally, people of the south. The
Drukpas, the Buddhist elite, and the
Hindu Lhotshampa had coexisted, large-
ly in peace, until 1989, when the king in-
troduced a One Nation, One People
policy imposing Drukpa social norms on
everyone. The edict controlled the smal-
lest details of our public lives: howwe
ate, dressed and talked. The Nepali lan-
guage was banned in schools, and Hindu
pathshalas, or seminaries, which teach
the Sanskrit scriptures, were closed.
Protests demanding an end to the ab-
solute monarchy and persecution of the
Lhotshampa beginning in summer 1990
were quashed, and repression includ-
ing torture, sexual assault, evictions
and discriminatory firing intensified.
As part of the govern-
ments campaign of
intimidation in the
south, my school was
suddenly closed.
That day, the head-
master summoned us
to an assembly, an-
nounced that we
were to collect our
belongings and told
us to go home at
once. I passed my final months in
Bhutan not completing the fourth
grade, but helping to rear our animals.
One winter day in 1991, my mother
was in the kitchen, my father was shav-
ing and my siblings and I were
gathered for snacks. It must have been
noon I remember the buzzing of bees
leaving for their routine forage when
uniformed officers burst into the house
and seized our citizenship documents,
birth certificates and other papers.
They accused my father of waging war
against the government. They ordered
himto put on his bakkhu, the Drukpa
national outfit, which was still wet from
the wash that morning, and then
dragged himout, kicking himand slap-
ping him. He was taken with dozens of
our neighbors to a high school that had
been converted to a military camp.
My father was held for 91 days in a
small, dank cell. They pressed himdown
with heavy logs, pierced his fingers with
needles, served himurine instead of wa-
ter, forced himto chop firewood all day
with no food. Sometimes, they burned
dried chilies in his cell just to make
breathing unbearable. He agreed even-
tually to sign what were called volun-
tary migration forms and was given a
week to leave the country our family
had inhabited for four generations.
Not knowing when wed be back, we
set our animals free and left open the
doors and windows of the house. We
walked in spring showers to the border
with India, through forest and valleys.
At the border, the Indians, who wanted
nothing to do with us, piled us into trucks
and dumped us at the doorstep of Nepal.
We were among the 90,000 Bhutanese
refugees who flooded shelters in east-
ern Nepal at that time. The population
grewto more than 115,000, as people
kept trickling in and children were born.
My parents, a brother and I have called
these shelters our home for 21 years.
The original seven refugee camps
have shrunk to two, but 36,000 people
continue to live in misery here. More
than 80,000 have been resettled in other
countries; 68,000, including my wife,
most of my siblings and extended fam-
ily, have moved to the United States. I
expect to be able to join themvery soon.
Helping us, though, is not the same as
helping our cause: Every refugee who
is resettled eases the pressure on the
Bhutanese government to take respon-
sibility for, and eventually welcome
back, the population it displaced.
Bhutan became a constitutional mon-
archy in 2008, two years after King
Jigme Singye Wangchuck abdicated
the throne to his eldest son. To live up to
its promises of democracy and its repu-
tation as a purveyor of happiness, the
government must extend full civil
rights including citizenship and the
right to vote to all of the Lhotshampa
still in its borders. It also must allow
those Lhotshampa it expelled to return.
Instead, Bhutan has ignored our de-
mands; multiple rounds of talks between
Bhutan and Nepal over the status of the
Lhotshampa have yielded little progress.
The international community can no
longer turn a blind eye to this calamity.
The United Nations must insist that
Bhutan, a member state, honor its con-
vention on refugees, including respect-
ing our right to return.
Other countries bear responsibility,
too. Nepal, impoverished and internally
divided, is already home to large num-
bers of Tibetan refugees and other
stateless peoples, and has not wel-
comed the Lhotshampa, even though
we share an ancestry. Nor has it ad-
equately sought help fromother coun-
tries to manage its refugee problem. In-
dia should use its influence to pressure
Bhutan to do the right thing; it should
then reopen the roads it created to ac-
commodate the exodus of refugees
but this time to allowour safe return.
But until the world looks behind the
veil of the Shangri-La, I have no hope of
retracing my path home.
VIDHYAPATI MISHRA is the managing editor
of Bhutan News Service, a news service
for Bhutanese refugees. He wrote this es-
say fromthe Beldangi II refugee camp.
Obama is waiting for Kerry to achieve
real progress on reviving Israeli-Pales-
tinian talks before getting very involved.
We were
among the
90,000
Bhutanese
refugees who
flooded shel-
ters in east-
ern Nepal.
NICHOLAS BLECHMAN
In many
countries
there is a new
alienation,
a newyearn-
ing, and even-
tually this
energy finds
an outlet.
TUESDAY, JULY 2, 2013 | 7 THE GLOBAL EDITION OF THE NEW YORK TIMES
. . . .
18-20 September 2013, Christ Church, Oxford
Register your interest: www.globalhorizons.oxan.com
The Middle East:
Seizing the Initiative
Pierre Vimont
Executive Secretary General
European External Action Service
Ibrahim Kalin
Deputy Undersecretary
Prime Ministry of Turkey
Hesham Youssef
Chef de Cabinet
League of Arab States
Shifting global energy patterns, political instability and changing
priorities in US foreign policy are set to transform the role much
of the region plays on the world stage in the next ten years.
This is just one of over twenty sessions where leading academics and
speakers from politics and business will ofer insight and judgment on a
range of global issues at
Global Horizons: The 30th Oxford Analytica Conference
Attendance by invitation only.
commentary letters views
Paul
Krugman
Is life too easy for the unemployed? You
may not think so, and I certainly dont
think so. But that, remarkably, is what
many and perhaps most Republicans
believe. And theyre acting on that be-
lief: Theres a nationwide movement in
America under way to punish the un-
employed, based on the proposition that
we can cure unemployment by making
the jobless even more miserable.
Consider, for example, the case of
North Carolina. The state was hit hard
by the Great Recession, and its unem-
ployment rate, at 8.8 percent, is among
the highest in the nation, higher than in
long-suffering California or Michigan.
As is the case everywhere, many of the
jobless have been out of work for six
months or more, thanks to a national
environment in which there are three
times as many people seeking work as
there are job openings.
Nonetheless, the states government
has just sharply cut aid to the unem-
ployed. In fact, the Republicans con-
trolling that government were so eager
to cut off aid that they didnt just reduce
the duration of benefits; they also re-
duced the average weekly benefit, mak-
ing the state ineligible for about $700
million in federal aid to the long-term
unemployed.
Its quite a spectacle, but North Caro-
lina isnt alone: Anumber of other
states have cut unemployment benefits,
none at the price of losing federal aid.
And at the national level, Congress has
been allowing extended benefits intro-
duced during the economic crisis to ex-
pire, even though long-termunemploy-
ment remains at historic highs.
So whats going on here? Is it just
cruelty? Well, the G.O.P., which in many
states is denying health care to the poor
simply to spite President Obama, isnt
exactly overflowing with compassion.
But the war on the unemployed isnt mo-
tivated solely by cruelty; rather, its a
case of meanspiritedness converging
with bad economic analysis.
In general, modern conservatives be-
lieve that our national character is be-
ing sapped by social programs that, in
the memorable words of Paul Ryan, the
chairman of the House Budget Commit-
tee, turn the safety net into a ham-
mock that lulls able-bodied people to
lives of dependency and complacency.
More specifically, they believe that un-
employment insurance encourages job-
less workers to stay unemployed,
rather than taking available jobs.
Is there anything to this belief? The
average unemployment benefit in North
Carolina is $299 a week, pretax; some
hammock. So anyone who imagines that
unemployed workers are deliberately
choosing to live a life of leisure has no
idea what the experience of unemploy-
ment, and especially long-termunem-
ployment, is like. Still, there is some evi-
dence that unemployment benefits
make workers a bit more choosy in their
job search. When the economy is boom-
ing, this extra choosiness may raise the
non-accelerating-inflation unemploy-
ment rate the unemployment rate at
which inflation starts to rise, inducing
the Federal Reserve to raise interest
rates and choke off economic expansion.
All of this is, however, irrelevant to
our current situation, in which inflation
is not a concern and the Feds problem
is that it cant get interest rates low
enough. While cutting unemployment
benefits will make the unemployed
even more desperate, it will do nothing
to create more jobs which means
that even if some of those currently un-
employed do manage to find work, they
will do so only by taking jobs away from
those currently employed.
But wait what about supply and
demand? Wont making the unem-
ployed desperate put downward pres-
sure on wages? And wont lower labor
costs encourage job growth? No
thats a fallacy of composition. Cutting
one workers wage may help save his or
her job by making that worker cheaper
than competing workers; but cutting
everyones wages just reduces every-
ones income and it worsens the bur-
den of debt, which is one of the main
forces holding the economy back.
Oh, and lets not forget that cutting
benefits to the unemployed, many of
whomare living hand-to-mouth, will
lead to lower overall spending again,
worsening the economic situation, and
destroying more jobs. The move to slash
unemployment benefits, then, is coun-
terproductive as well as cruel; it will
swell the ranks of the unemployed even
as it makes their lives more miserable.
Can anything be done to reverse this
policy wrong turn? The people out to
punish the unemployed wont be dis-
suaded by rational argument; they
knowwhat they know, and no amount
of evidence will change their views. My
sense, however, is that the war on the
unemployed has been making so much
progress in part because it has been fly-
ing under the radar, with too many
people unaware of whats going on.
Well, nowyou know. And you should
be angry.
Roger
Cohen
GLOBALI ST
ELOUNDA, GREECE The unexamined
life is not worth living, said Socrates.
Pronounced of a Cretan summer even-
ing in an outdoor theater, with a breeze
wafting through the olive groves, the
thought is doubly arresting perhaps
because it is evident in such a setting
that we make poor choices in our lives
by not exposing ourselves more to such
beauty.
Another thing is apparent: South
European nations, the peripheral
ones in current parlance, have a hard-
ship-softener too little factored into as-
sessments of E.U. crisis the sun
even if Germany has the money. That is
one reason, along with the strength of
family ties and the underground econo-
my, why we have not seen a European
eruption along the Mediterranean, as
unemployment has soared.
Over the past three years, since
Greece hit the panic button, Europes
pain has been much examined, with in-
conclusive results. As Woody Allen
noted, What if the examined life turns
out to be a clunker as well?
The viewthat the 28-nation E.U., with
Croatia joining this week, and particu-
larly its 17-nation euro zone, is nowa
terminal clunker has become fashion-
able. The crisis that began in Greece
has been controlled for now, but much
of Europe, including France, is in reces-
sion. The questions triggered here
about the future of Europe, and its com-
mon currency, are unresolved.
The Union that was the European
miracle of the second half of the 20th
century nowembodies the malaise of
the 21st.
Acounterargument exists. It is that
the agony of the euro will end up illus-
trating Jean Monnets phrase that crises
are the great federators of history. The
planned European banking union, single
supervisory systemand fiscal harmon-
ization will prove to be the catalysts of
the Continents ever closer union.
I heard both the European break-up
and breakthrough views in equal mea-
sure during a conference here. What is
unquestionable is that Europe is living
its deepest unease since the end of the
Cold War.
France and Germany were the
twinned engines of European integra-
tion: France gave the political lead,
Germany the economic muscle. That is
over. German dominance over a drift-
ing France is so evident as to be almost
embarrassing.
The French can no longer persuade
themselves that the Union will be
France writ large, and so they are am-
bivalent. Germany, uncertain about
power because of the way it once used
it, is hesitant about assuming what it is:
Europes leading nation. It faces plenty
of misgivings, not least in Greece, about
any whiff of German assertiveness.
Britain might have stepped into this
void. Instead, it stepped out the way.
Under a Tory leader, in the grip of dif-
fuse anger spewing fromausterity, it
has gone on a euro-skeptic walkabout.
Areferendumlooks likely on continued
E.U. membership in 2017.
The deepest problemis social (with
the exception of the cohesive German
model). Healthy markets require an
equal dose of greed and fear. For a
while all the easy money in the euro
zone removed the fear factor. The rich
got wildly richer. Nowthe hangover
fromthe meltdown of 2008 persists in
far sharper formthan in the United
States, which responded better.
It is compounded by austerity, ex-
acerbated by strong feelings of in-
justice, fed by the fact that in countries
like Greece credit is not getting into
the real economy. Without credit there
can be no resumption of growth.
Massive fiscal adjustments have been
made but people do not believe the
worst is over and they blame the Un-
ion.
What, they ask, is this undemocratic
thing for? Not for our defense (peace is
taken for granted); not for our prosper-
ity (it has dwindled); not to build a
United States of Europe that will count
(the idea has become fanciful).
Ingratitude and short memories are
facts of life. The Union is suffering from
themat a time when the euro needs fed-
eralizing measures to be a credible cur-
rency. The question is whether these
needed unifying steps are politically
tenable as a populist anti-European
right is rising in France, under Marine
Le Pen, and elsewhere.
The federalizing path is achievable.
But it will require newleadership to
make the case. About 80 percent of the
worlds growth in the past five years
has been in developing countries. For a
Europe of dwindling importance to
break itself up would be to ignore the
course of history.
Europe needs a persuasive idea of its
future that can rebuild democratic sup-
port. It needs growth. For that it needs
competitiveness. These truths must be
told.
As the 100th anniversary of World
War I approaches, the European killing
fields of the 20th century fade. Their
story, and howthe Union stopped the
cycle of bloodshed, and howit later ce-
mented the freedomof ex-Communist
states, needs to be retold.
The euro is a political idea born of
calamitous European experience. Un-
raveling would provide a sharp remind-
er of the calamities. That truth also
needs to be retold. I can think of no one
better to do so than the winner of the
German election in September.
Crisis can still be the federator if
leaders have a sense of history and a
viewof the future that extends beyond
tomorrow.
You can followme on Twitter, or join me
on Facebook.
Booze as muse
Meanwhile
CHRI STOPHER BUCKLEY
My first real job in journalismwas as a
junior editor at Esquire, a magazine
with a venerable literary pedigree. I
imagined myself having three-martini
lunches with TomWolfe, and explaining
to Tom (surely we would be on a
first-name basis by the third martini)
that his latest 25,000-word article was
not bad, exactly, but needed another
run through the typewriter before we
could even think of publishing it.
This absurd, callowreverie was sum-
marily dashed by my first assignment.
I was told to call up someone famous
anyone famous and get his or her
favorite Bloody Mary recipe for the
summer issue. I called an old girlfriend
who had married a certifiably famous
movie director.
He only drinks Scotch neat, she
said. But well just make something
up. The ghost of Esquires founder,
Arnold Gingrich, winced over my
shoulder as she and I went to work de-
vising her famous husbands fictional
Bloody Mary. It ended up consisting of
20 or so ingredients, 15 of which con-
tained toxic levels of capsaicin. For
months after it was published, I lived in
fear that wed be sued for immolating
some poor readers esophagus.
I think back on my first shameful ven-
ture in legitimate journalism every
time I come across the latest improbable
recipe for some newcocktail. I dont
mean to imply that their creators are as
spurious as I was; theyre fun to read,
and the more improbable the better.
Kingsley Amis, author of the indis-
pensable Everyday Drinking, referred
to the genre as dipsography, the alco-
holic equivalent of pornography. Dipso-
graphy is continuing ed of the highest or-
der. Howsatisfying and knowing it is to
drop savvy remarks like Did you win-
terize your margarita this year?
At the same time, its best not to
overdo the dipsography, at the risk of
getting yourself a rep as a cocktail
bore, beer bore, aquavit bore, etc.
Who among us has not been held cap-
tive by a wine, single malt or vodka
bore? Thanks to the recent prolifera-
tion of boutique vodkas, it is nowpossi-
ble, indeed likely, to have your eyes as
frosted as a Grey Goose bottle while
someone holds forth at Homeric length
on potato versus grain versus molasses
versus organic wheat versus Australi-
an sugar cane. My eyes glazed over just
typing that sentence.
Booze for present purposes, let us
include in this category wine, beer, eau
de vie, moonshine, the blushful Hippo-
crene and all varieties of intoxicating li-
quid refreshment is a compelling sub-
ject. And dipsography has evolved pari
passu with the progress of the Internet.
Surfing a large wave of ethyl alcohol
recently, I came ashore on the Web site
of the Museumof the American Cock-
tail. The home page noted that it was
World Cocktail Week. Beneath that was
a notice: There are no seminars or
events scheduled at the current time.
Please check back later. Had I pos-
sessed hacking skills, Id have been
tempted to insert a hic some-
where in the last sen-
tence.
For classic literary
dipsography and
counter-dipsography
log off fromthe In-
ternet and turn to the
bookshelf. Roald
Dahls short story
Taste is the ulti-
mate takedown of the
wine bore. Arather sinister dinner
guest proposes to his host a contest: If
he identifies the wine the host is pour-
ing, he wins the hand of the hosts
daughter. If he fails, then the host gets
both his houses.
I wont ruin it for you; its white-
knuckle reading all the way to the fin-
ish. When Alfred A. Knopf read the sto-
ry in The NewYorker in 1951, he signed
Dahl to write a collection, and a bril-
liant career was born. Come to think of
it, surely the magazines most celebrat-
ed cartoon remains James Thurbers:
Its a nave domestic Burgundy with-
out any breeding, but I think youll be
amused by its presumption.
Benjamin Disraeli is not principally
known as a maker of bons mots, but in
his 1845 novel Sybil, he gives us Mr.
Mountchesneys unimprovable re-
mark: I rather like bad wine. One gets
so bored with good wine.
Continuing on the prime ministerial
theme, Amiss Everyday Drinking
provides the recipe for Queen Victorias
Tipple: 1/2 tumbler red wine and
brace yourself Scotch.
Europes truths
War on the unemployed
I have it on the authority of Colm
Brogan, he writes, that the Great
Queen was violently opposed to teeto-
talism, consenting to have one cleric
promoted to a deanery only if he prom-
ised to stop advocating the pernicious
heresy.
Elsewhere, the Muse of Booze, as
Christopher Hitchens calls Mr. Amis in
his introduction to the reissue of
Everyday Drinking, gives us recipes
for Paul Fussells Milk Punch (to be
drunk immediately on rising, in lieu of
eating breakfast) and Evelyn Waughs
Noonday Reviver (1 hefty shot gin, 1
bottle Guinness, ginger beer ... I should
think two doses is the limit).
Amis was author of probably the
most immortal hangover scene in all lit-
erature. (The one suffered by Tom
Wolfes louche British journalist Peter
Fallowin Bonfire of the Vanities is
up there.) Amis demurely refrains from
mention of his own masterpiece mo-
ment in Lucky Jim, though one of his
cocktail recipes is named after the title.
He does however give us three infal-
lible hangover cures, adding though
I have not tried any of the three. The
first two are: Go down the mine on the
early-morning shift at the coal-face
and Go up for half an hour in an open
aeroplane, needless to say with a non-
hungover person at the controls.
I mentioned Christopher Hitchens a
moment ago. It seems fitting that he
should provide our nightcap. He and I
once had a weekday lunch that began at
1 p.m. and ended at 11:30 p.m. I spent
the next three weeks begging to be eu-
thanized; he went home and wrote a
dissertation on Orwell. Christopher
himself was a muse of booze, though
dipsography and fancy cocktails were
not his thing. Christopher was a
straightforward whiskey and martini
man. In his memoir, Hitch-22, he
made a solid case for liquidity.
Alcohol makes other people less te-
dious, he writes, and food less bland,
and can help provide what the Greeks
called entheos, or the slight buzz of in-
spiration when reading or writing.
Tempted as I am, I wont close by
saying, Ill drink to that, because I
just found this recipe for a kumquat and
clove gin and tonic, and Imthinking it
might be more fun to drink to that.
CHRISTOPHER BUCKLEY is the author of a
forthcoming book of essays, But
Enough About You.
Who among
us has not
been held
captive by a
wine, single
malt or vodka
bore?
BY CHAPPATTE IN NZZ AM SONNTAG (ZURICH). GLOBE CARTOON
INTERNATIONAL HERALD TRIBUNE 8 | TUESDAY, JULY 2, 2013
. . . .
world news middle east
BY DENISE GRADY
As the scientists peered into the dark-
ness, their headlamps revealed an eerie
sight. Hundreds of eyes glinted back at
them from the walls and ceiling. They
had discovered, in a crumbling, long-
abandoned village half-buried in sand
near a remote town in southwestern
Saudi Arabia, a roosting place for bats.
It was an ideal place to set up traps.
The search for bats is part of a inves-
tigation into a deadly new viral disease
that has drawn scientists from around
the world to Saudi Arabia. The virus,
first detected there last year, is known
to have infected at least 77 people, in-
cluding 40 who died, in eight countries.
The illness, called MERS, for Middle
Eastern respiratory syndrome, is
caused by a coronavirus, a relative of
the virus that caused severe acute res-
piratory syndrome, or SARS. That virus
originated in China and caused an inter-
national outbreak in 2003 that infected
at least 8,000 people, including nearly
800 who died.
Critical questions about MERS re-
main unanswered. Scientists do not
know where it came from, where the vi-
rus exists in nature or why it has ap-
peared now. They do not know how
people are being exposed to it or wheth-
er it is becoming more contagious and
could erupt into a much larger out-
break.
The disease almost certainly origin-
ated with one or more people contract-
ing the virus from animals probably
bats but scientists do not know how
many times that kind of spillover to hu-
mans has occurred, nor how likely it is
to keep happening.
There is urgency to the hunt for an-
swers. Half the known cases have been
fatal, though the real death rate is prob-
ably lower, because there almost cer-
tainly have been mild cases that have
gone undetected. But the virus still wor-
ries health experts, because it can cause
such severe disease and has shown an
alarming ability to spread among pa-
tients in a hospital.
The disease is a chilling example of
what healthexperts call emerginginfec-
tions, caused by viruses or other organ-
isms that suddenly find their way into
humans. Many of those diseases are
zoonotic, meaning they are normally
harbored by animals but somehow
manage to jump species.
As the population continues to grow,
were bumping up against wildlife, and
theyhappentocarrysomenastyviruses
weve never seen before, said Peter
Daszak, adiseaseecologist andthepres-
ident of EcoHealth Alliance, a scientific
group that studies links between human
health, wildlife and the environment.
Saudi Arabiahas hadthemost patients
so far, but cases have also originated in
Jordan, Qatar and the United Arab Emir-
ates. Travelers from the Arabian penin-
sula have taken the disease to Britain,
France, Italy and Tunisia and have infec-
ted a fewpeople in those countries.
The illness can be spread by coughs
and sneezes, or contaminated surfaces,
and people with chronic diseases seem
especially vulnerable. Acluster of cases
that beganina Saudi hospital inApril ul-
timately involved 23 people, including
several family members and health
workers.
Some health experts have suggested
that MERS, like SARS, may fade away.
The SARS outbreak erupted in early
2003, but had ended by that summer.
Much of the success in containing it was
attributed to infection control in hospit-
als and also to eliminating animals like
civet cats, which were thought to be in-
fecting people in markets where the an-
imals were being sold live to be killed
and eaten.
But Dr. Allison McGeer, a microbiolo-
gist and infectious disease specialist at
Mount Sinai Hospital in Toronto who is
also part of the team that studied the
Saudi hospital outbreak, saidthere were
no signs that MERS was going away.
Absolutely not, she said. There are
ongoing cases of disease acquired in the
community. The first we know about is
April 2012 in Jordan. There has been a
steady and continuing number of cases.
The fact that the disease has appar-
ently emerged in geographically dispar-
ate places, with widely scattered out-
breaks in four Middle Eastern
countries, also makes Dr. McGeer doubt
that it is simply going to fizzle out.
Finding out where inthe environment
the disease is coming from might make
it possible to tell people how to avoid it.
Bats are the leading suspect, because
they are a reservoir of SARS and carry
other coronaviruses with genetic simil-
arities to the MERS virus. Bats could be
transmitting the disease directly to
people, or they might be spreading it to
some other animal that then infects hu-
mans.
Last October, to test the theory, a
team of scientists from the Saudi Min-
istry of Health, Columbia University
and EcoHealth Alliance began scouring
towns near where cases of MERS had
been reported, showing people pictures
of bats and asking if they had seen any.
They struck pay dirt when one man led
them to an abandoned village said to be
hundreds of years old. It was there, in
the inky darkness, that they found a
small roomthat had become the roost of
about 500 bats.
The scientists set up nets to catch
themwhen they flewout at dusk to hunt
insects, then spent the night testing
themfor the MERS virus. The bats were
released after the testing.
The animals can weigh as little as four
grams, or one-seventh of an ounce, and
a bat that size may have an eight-inch
wingspan the equivalent of 20 centi-
meters.
Theyre mostly wing, said Kevin J.
Olival, a biologist with EcoHealth Alli-
ance. Theyre little flying fur balls.
It takes about 15 minutes to process a
bat to weigh and measure it, swab it
for saliva and feces samples, and collect
some blood and a tiny plug of skin from
a wing for DNA testing to confirm its
species.
Bats do not much appreciate all this
medical attention. They bite, and in ad-
dition to potentially carrying MERS,
they may harbor rabies and other vir-
uses.
Hundreds of bats have beentested, he
said, but it is too soon to disclose the re-
sults.
The team has also tested camels,
goats, sheep and cats, which might act
as intermediate hosts, picking up the vi-
rus frombats and then infecting people.
One reason for suspecting camels is
that a MERS patient from the United
Arab Emirates had been around a sick
camel shortly before falling ill. But that
animal was never tested.
If animals do harbor the virus, does it
make themill? Do they infect people by
coughing? Or do they pass the virus in
urine or feces and infect people who
clean their stalls? The answers do not
come easily.
Camels are tough, let me tell you,
said Dr. Jonathan H. Epstein, a veterin-
arian with EcoHealth Alliance, explain-
ing howdifficult it is to test them.
Theyre ornery. It takes a certain
kind of person to be able to wrangle a
camel. Theyre strong, theyre fast, they
bite really hard.
So far, he said, none of the animals
we looked at were overtly sick.
Testing may identify animal species
that carry the virus, but that will not im-
mediately explain why it has emerged
now.
The most common reason that wild-
life viruses make the jump into people is
that we do things that bring us and our
livestock into closer contact with wild-
life, such as the wildlife trade or agricul-
tural intensification, Dr. Epstein said.
And, Dr. Olival added, finding the an-
imals that carry the disease is not just
an academic exercise.
Its a way to inform public health
measures, he said, to try to stop zo-
onotic diseases before they emerge into
humans.
Following the trail of a deadly newvirus
Research draws teams
from around the world to
a corner of Saudi Arabia
Generals in Egypt give the president an ultimatum
forces had failed to reach consensus
and resolve the crisis on their own by a
deadline set last week in a statement
from the defense minister, Gen. Abdul
Fattah el-Sisi.
The wasting of more time will only
create more division and conflict, the
statement continued, pledging that the
armed forces own road map would
include the participation of all the sin-
cere national factions and trends. The
general added a special mention for in-
clusion of the youth, whomthe gener-
als called the exploders of their glori-
ous revolution.
Manyof thedemonstratorsnowcalling
for Mr. Morsis ouster spent months last
year marching to demand that the mili-
tary give up its hold on power. And at a
continuing demonstration outside the
presidential palace to call for Mr. Morsis
exit, marchers hadbeenchantingagainst
both Brotherhood rule and military
rule when the announcement came out.
But different cheers broke out imme-
diately. The army and the people are
one hand! protesters chanted, recall-
ing the heady days immediately after
the overthrowof Mr. Mubarak when the
military was first hailed as a savior.
Many said their protests would con-
tinue. I think its late, said Hassan Is-
mail, a local organizer. There has been
a lot of blood."
He rejected any compromise that
would leave Mr. Morsi in office, and at
the same time sought to distinguish the
anti-Morsi movement fromthe military.
We dont want to be against the army,
Mr. Ismail said. And we dont want the
army to be against us.
The Health Ministry said earlier on
Monday that 16 people had died in the
protests, including eight in a battle out-
side the MuslimBrotherhoodheadquar-
ters, most of them from gunshot
wounds. All of those killed outside the
headquarters were young, including
one who was 14 and another who was 19,
the ministry said. One died of heat-re-
lated causes at a demonstration outside
the presidential palace.
After dawn broke Monday, some dem-
onstrators remained in Tahrir Square,
epicenter of Egypts ArabSpringrevolu-
tion, resting under impromptu shelters.
While much of the protest elsewhere in
Cairo seemed peaceful, activists report-
ed dozens of sexual assaults on women
in Tahrir Square overnight.
The fiercest confrontation seemed to
be at the Brotherhood headquarters,
where members of the organizationwho
were trapped inside fired bursts of bird-
shot at the attackers and wounded sev-
eral of them.
After pelting the almost-empty build-
ing for hours with stones, gasoline
bombs and fireworks, the attackers
doused its logo with kerosene and set it
onfire, witnesses said, seemingto throw
what appeared to be sandbags used to
fortify the windows out onto the street.
It was not immediately clear what be-
came of the Brotherhood members, but
shortly before the building was
stormed, armored government vehicles
were seeninthe area, possiblyas part of
an evacuation team.
The scale of the demonstrations, just
one year after crowds in the same
square cheered Mr. Morsis inaugura-
tion, appeared to exceed even the mass
street protests in the heady final days of
the uprising that overthrew Mr.
Mubarak in 2011.
Clashes between Mr. Morsis oppo-
nents andsupporters broke out insever-
al cities around the country, killing at
least sevenpeople one inthe southern
town of Beni Suef, four in the southern
townof Assiut andtwoinCairoandin-
juring hundreds. Protesters ransacked
Brotherhood offices around the country.
Demonstrators said they were angry
about the lackof public security, the des-
perate state of the Egyptian economy
and an increase in sectarian tensions.
But the common denominator across
the country was the conviction that Mr.
Morsi had failed to transcend his roots
in the Brotherhood, an insular Islamist
group officially outlawed under Mr.
Mubarak that is now considered
Egypts most formidable political force.
The scale of the protests across the
country delivered a sharp rebuke to the
groups claim that its victories in
Egypts newly open parliamentary and
presidential elections gave it a mandate
to speak for most Egyptians.
Enough is enough, said Alaa al-As-
wany, a prominent Egyptian writer who
was among the many at the protests
who had supported the president just a
year ago. It has been decided for Mr.
Morsi. Now, we are waiting for him to
understand.
Shadi Hamid, a researcher at the
Brookings Doha Center in Qatar who
studies the Muslim Brotherhood
closely, said: The Brotherhood under-
estimated its opposition. He added,
This is going to be a real moment of
truth for the Brotherhood.
Mr. Morsi and Brotherhood leaders
have often ascribed much of the opposi-
tion in the streets to a conspiracy led by
Mubarak-era political and financial
elites determined to bring them down,
and they have resisted concessions in
the belief that the oppositions only real
motive is the Brotherhoods defeat. But
no conspiracy can bring millions to the
streets, and by Sunday night some ana-
lysts said the protests would send a
message to other Islamist groups
around the region in the aftermath of
the Arab Spring.
It is a cautionary note: Dont be too
eager for power, and try to think how
you do it, Mr. Hamid said, faulting the
Egyptian Brotherhood for seeking to
take most of the power for itself all at
once. I hear concern from Islamists
around the region about how the Broth-
erhood is tainting Islamism.
Mr. Morsis administration appeared
caught by surprise. There are
protests; this is a reality, Omar Amer, a
spokesman for the president, said at a
midnight news conference. We dont
underestimate the scale of the protests,
and we dont underestimate the scale of
the demands.
He said the administration was open
to discussing any demands consistent
with the Constitution, but he also
seemed exasperated, sputtering ques-
tions back at the journalists. Do you
have a better idea? Do you have an ini-
tiative? he asked. Suggest a solution
and were willing to consider it serious-
ly.
Mayy El Sheikh contributed reporting.
EGYPT, FROM PAGE 1
TARA TODRAS-WHITEHILL FOR THE NEW YORK TIMES
In a fierce confrontation on Monday, protesters burned the emblem of the Muslim Brotherhood at the groups headquarters in Cairo after storming the building.
The Brotherhood
underestimated its opposition.
This is going to be a real
moment of truth.
Scientists do not know where
the virus came from, where it
exists in nature or why it has
appeared now.
TUESDAY, JULY 2, 2013 | 9 THE GLOBAL EDITION OF THE NEW YORK TIMES
. . . .
ADVERTISING SUPPLEMENT
LEARNING FROMCRISIS | Economic, political, humanitarian and moral dimensions
For healthy economies and societies, global action is needed, says President Nazarbayev
O
nce more, Kazakhstans head of
state, Nursultan Nazarbayev, has
called for firm and timely action to
stem and eventually reverse economic, so-
cial and environmental setbacks in the
world. He spoke at the opening of the Sixth
Astana Economic Forum in the countrys
capital on May 23, which for the first time in-
cluded the G-Global World Anticrisis Confer-
ence under the auspices of the United Na-
tions. Together, the events attracted more
than 10,000 participants, some 3,000 of
whom had come from 132 countries
abroad.
The president noted a number of les-
sons [to be] taken into account from the
response to the ongoing economic crisis.
Only recently, late last year, everybody in
the world was convinced that the first uni-
versal crisis of the 21st century was a
turned page in our history, President Naz-
arbayev told the audience. This is what
many financial institutions have persist-
ently argued. But there turned out to be no
place for euphoria.
President Nazarbayev listed what he
called an artificial blow-up of financial
bubbles, a craving for easy money, an
absence of proper responsibility of nation-
al financial institutions and the weakness
of global financial management as the
main reasons for the continuing downturn.
Hence, the world crisis cannot be con-
sidered as finished, he said.
A second lesson, he said, is the need for
global action, which has not been addressed
so far. Kazakhstan, as you know, has car-
ried out a successful anticrisis program, he
told the forum. It ensured saving jobs and
positive dynamics of economic growth. But,
he warned: Not every single anticrisis rec-
ommendation developed within the G-20
has been implemented. Many states have
taken protectionist measures. This caused
a slowdown of global growth, and drops in
prices on global and regional markets. The
volumes of cross-border lending and invest-
ment have decreased and now amount to
just 60 percent of the precrisis level.
The tenacity of the crisis has also
caused the persistence of
what President Nazarbayev
dubbed a sharp deteriora-
tion of peoples social feel-
ings, resulting in protests
and sometimes violence
with the Arab Spring repre-
senting extreme disaffec-
tion. The International Labor
Organization forecasts over
200 million unemployed in
the world this year alone,
the president observed.
Early this year, Europe had
over 26 million unemployed,
which is 1.5 times as many as five years
ago. Many countries cut government
spending on education, health care and hu-
man-potential development. All of these
are clear indicators of a global social crisis
threatening to lower the standards of living
even in developed countries.
A major element contributing to the
overall deterioration is a lack of solidarity
between individual states, he said. The so-
cial injustice existing in many countries is
H
owcan Europes and in particular
the euro zones economies be re-
vived, and howcan emerging econo-
mies avoid the pitfalls that they have expe-
rienced? That was the main question
dominating lively debates and garnering a
remarkably high level of consensus during
the Sixth Astana Economic Forum held on
May 22-24. Nobel laureates and other aca-
demics, senior politicians and former gov-
ernment leaders, entrepreneurial celebri-
ties and supranational organizations
representatives discussed the structures
of current problems and offered partial or
comprehensive solutions.
Their answers to burning questions ap-
peared to be far more complicated than
news headlines suggest and indicated that
a full response to the current deadlocks in
the world involves not just financial and eco-
nomic issues, but ecological, security and
social issues as well. Many speakers criti-
cized political decision-makers on national
levels for paying lip service to coordinated
action even as they put their national, and
often contradicting, interests at the top of
the list and for circumventing joint measures
meant to counter negative global trends.
Dominique Strauss-Kahn, who headed
the International Monetary Fund from2007
to 2011, criticized E.U. leaders for claiming
to promote employment and economic dy-
namism while in fact undermining the pro-
cess. They underestimated the situation,
he said, and did not do what any business-
man or entrepreneur usually does: pay the
debts and make a fresh start. The attitude
in the E.U. was as follows: they all believed
that things would go on the same way, that
nothing would change. The solution was
constantly postponed. And it grew like a
snowball.
He joined the chorus calling for a Euro-
pean banking union but at the same time
declared himself pessimistic on the out-
look. The basis of local politics is: the smal-
ler the risk, the better the consequences,
he said. But we need to take risks. We can-
not solve problems without risks.
Strauss-Kahn added later: We need a
body that will direct the systemand serve as
a locomotive. Without coordination from a
fiscal point of view, we will not be able to
move forward. He continued: The problem
is not only with debt. The problem is with
competitiveness. And the problemof debt is
only protection in order to avoid the prob-
lems of competitiveness. The golden age of
Europe has passed, and keeping up the
standard of living needs to be supported on
the same level. I think during the next four to
five years in this part of the world growth will
be slow and social tensions will persist.
In various sessions at the forum, special
ASTANA ECONOMIC FORUM| Governments, business community and civil society
States must work together to revitalize growth and create jobs, say forum delegates
emphasis was placed on Kazakhstans im-
minent entry to the World Trade Organiza-
tion. In one session on Kazakhstans pros-
pects for agricultural development as a
member of the WTO, the organizations
deputy director general, Alejandro Jara, said:
Kazakhstan has achieved significant pro-
gress toward joining the WTO. At the final
stage of negotiations concerning Kazakh-
stans membership in the WTO, issues of
state support of agriculture, in particular ex-
port subsidies, sanitary and phytosanitary
standards are under discussion.
Another topic that many speakers
touched upon was the formation of the Cus-
toms Union of Russia, Belarus and Kazakh-
stan, which is poised to become the Eurasi-
an Economic Union.
Kairat Kelimbetov, deputy prime minister
of Kazakhstan, with economic relations and
development in his portfolio, told the forum:
One of the main advantages of creating the
Customs Union is a large market with 170
million people and about $2 trillion in capital,
which is a strong signal for our partners and
investors to invest capital for free develop-
ment as part of the common economic
space, where administrative barriers are
eliminated and the conditions for doing busi-
ness are simplified. Accelerated formation
of the Customs Union and common eco-
nomic space has minimized the con-
sequences of the global economic crisis and
has become an additional source of eco-
nomic development for our countries.
Kelimbetov outlined the benefits of the
formation of the EEUand its eventual expan-
sion. The creation of the Eurasian Econom-
ic Union will ensure the free movement of
goods, services, capital and labor and the
elimination of barriers remaining in their
way, he said. The formation of the EEU by
2015 is a strategic direction of further inte-
gration, provides participants in Eurasian
economic integration with great opportuni-
ties and opens up great prospects and max-
imal use of potential, which is the main task
for implementing the main directions of fur-
ther integration.
Praise for the forums host country came
from many participants. Romano Prodi,
former prime minister of Italy and former
president of the European Commission,
noted in an interview with Kazinform: The
economy is like a house with the foundation
and the walls: Kazakhstan has everything. I
mean, these are all prerequisites for Ka-
zakhstan to become a highly developed
state in the near future. In addition, I see that
Kazakhstan has strong government sup-
port for the middle class. You have built
schools and other social facilities. This is
also a prerequisite for the successful
development of the economy.
Appreciation for the dynamic role Ka-
zakhstan is playing in the worlds quest to
overcome economic stagnation also came
from Vuk Jeremic, this years president of
the United Nations General Assembly. Ka-
zakhstan is a regional pillar of stability and
progress, he said. It has prioritized the
education of its youth and has created
strong social and health-care safety nets.
The nations athletes have triumphed in suc-
cessive Olympic Games, and its scientists
have helped achieve significant break-
throughs in a number of areas. The econo-
my is developing rapidly, in no small mea-
sure due to the wise and responsible use of
the riches gained from abundant hydrocar-
bon resources. This has facilitated growth in
other sectors, such as agriculture. It has
also enabled funding for strategic infrastruc-
ture projects, including the construction of a
Western Europe-Western China energy and
transportation corridor. The ancient Silk
Road, which served as the main trade route
across the Eurasian landmass for centuries,
will soon be reborn. As a result, Kazakhstan
will integrate more fully into the global soci-
ety, serving as a critical bridge between East
and West. CHARLES van der LEEUW
Among the participants at the Astana Economic
Forum, May 22-24, were, from left to right:
Romano Prodi, former prime minister of Italy and
former president of the European Commission;
Alejandro Jara, deputy director general of the
World Trade Organization; and Dominique
Strauss-Kahn, former managing director of the
International Monetary Fund.
EURASIAN ECONOMIC UNION | Expansion seen by Customs Union members Kazakshtan, Russia and Belarus
Signing of agreement on Eurasian Commission is a milestone for economic integration
O
n May 29, Astana hosted a summit
of five heads of state of former So-
viet republics, confirming the impor-
tance of the Kazakh capital as a center of
top-level diplomacy. Meetings were held be-
tween President Nursultan Nazarbayev of
Kazakhstan and his peers Vladimir Putin of
Russia, Alexander Lukashenko of Belarus,
Ukraines Viktor Yanukovych and Almazbek
Atambayev of Kyrgyzstan.
Presidents Nazarbayev, Putin and
Lukashenko whose countries belong to a
Customs Union that is to become the Euras-
ian Economic Union by 2015 signed the
final agreement on the establishment and
installation of a Eurasian Economic Com-
mission. The commission takes inspiration
from the European Commission but has
considerably more power, including the right
to impose the adoption of national legisla-
tion in line with directives of the Eurasian
Economic Union.
Consultations were held with President
Yanukovych of Ukraine and President
Atambayev of Kyrgyzstan that resulted in
the official entry of the two countries, with
observer status, into the Customs Union
and Eurasian Economic Commission. The ul-
timate goal is their integration into the bloc
as full members.
Changes have been made to the regula-
tions on the activities of the Eurasian Eco-
nomic Commission for international negoti-
ations on trade, President Nazarbayev said
in a report by the state news agency, Kazin-
form. This document will enable the CU
member states to cooperate using the com-
mission platform. Today, the concept of a
joint agricultural policy within the Customs
Union has been approved between the
member states of the common economic
space. A common information system be-
tween the member states concerning mutu-
al and external trade has also been agreed
upon. An agreement has also been reached
relating to informational cooperation in the
field of statistics. A separate unit that we
have reviewed is the prospect of expanding
the CU and common economic space.
President Nazarbayev did not downplay
the enormousness of the task ahead and
signaled that it can be accomplished only if
member states are determined to proceed
toward cooperation and integration in a rap-
idly globalizing world, where individual com-
petitiveness is spawning a need for collec-
tive competitiveness.
In a separate Kazinform news report, he
said: Today is our first meeting at the
highest level within the framework of agree-
ments. The main thing is our common desire
for further integration. He stressed that in-
tegration should be beneficial for all partic-
ipants: States are going to integrate in or-
der to get something that they cannot get
being alone. The integration process should
be evolutionary. It is necessary to work to-
gether, to seek common ground and to do it
step by step.
During the summit, President Lukashen-
ko of Belarus paid special tribute to the host
country for the event.
We see Kazakhstan as the most at-
tractive and prospective partner for Be-
larus, Lukashenko said on his countrys na-
tional television station. We are ready to
participate and are already participating in
the modernization of your country. We have
a lot of projects and almost no problems in
their implementation.
In the run-up to the Astana meeting,
some participants attended a meeting of
the Collective Security Treaty Organization
member states in the presence of Presi-
dents Nazarbayev, Putin and Atambayev
and President Emomali Rahmon of
Tajikistan. On the agenda was the imminent
withdrawal of American and other troops
from Afghanistan, and challenges related to
territorial security.
CHARLES van der LEEUW
From left to right: President Viktor Yanukovych of Ukraine, President Alexander Lukashenko of Belarus, President Nursultan Nazarbayev of Kazakhstan, President Vladimir Putin of Russia and President Almazbek Atambayev of Kyrgyzstan at a summit in Astana
on May 29. A Eurasian Economic Commission was set up with Kazakhstan, Russia and Belarus as members, and Ukraine and Kyrgyzstan as observers.
also caused by financial and economic
inefficiency, he added. National anticrisis
plans cushioned the consequences of the
crisis but were not followed by efficient
root-targeting actions on a global level.
Then there is the monetary element,
which he said has been virtually ignored. Ac-
cording to President Nazarbayev, the four
parameters to heed in taking action are le-
gitimacy, democracy, efficient controllability
and responsibility. He added: To this day,
there have been neither efficient global an-
ticrisis mechanisms nor a reli-
able global reserve currency
or a group of regional curren-
cies. Insufficient will and re-
sponsibility were present to
take radical decisions.
The main reason the
worlds nations largely lack
readiness to take joint action
simply comes down to a lack
of trust, he suggested.
In President Nazarbayevs
words: I fully share the view-
point that the global crisis
primarily has been a crisis of
trust. There is no trust between global finan-
cial institutions and national states, be-
tween the actors of the financial sector and
the real economy. [] In the 21st century,
the world needs a new economic model. It
should be based primarily on a fair and just
global financial system free of deception, ir-
responsibility and wastefulness.
Calling for a pursuit for a sense of pro-
portion, President Nazarbayev explained:
First of all, the financial sector cannot and
must not develop in isolation from the real
sector, at both the global and national
levels. A situation such as prior to the crisis,
when the derivatives market turnover was
eight times higher than the entire planets
GDP, is suicidal for the global economy.
Second, it is important to resolve the issue
of global control over offshore zones. The
volume of funds that moved out of national
economies to offshore zones, or tax havens,
amounts to up to $30 trillion. These funds
can be considered time bombs that can det-
onate at any minute.
Stressing the economic, political, hu-
manitarian and moral dimensions of the
ongoing crisis, President Nazarbayev noted
that a new global economy is unthinkable
without establishing a new, just world or-
der. Calling on the United Nations, the G-8
forum of the worlds eight wealthiest coun-
tries and the wider G-20 countries to facili-
tate the buildup of such an order, the pres-
ident added: This includes the
development of a functioning mechanism
of a new global financial system and the
establishment of a global regulator that
would set the common rules of the game.
President Nazarbayev said that Kazakh-
stan has proved able to act as a catalyst
and an example of how to create new soci-
eties. Kazakhstan appeared on the politic-
al world map just over two decades ago, he
told the forum. We were starting everything
from the ground up, and today the achieve-
ments of our economy are acknowledged by
all. The key goal is to transform Kazakhstan
into one of the top 30most developed coun-
tries in the world, where progress is based
on innovative economic and social prin-
ciples. The most important among themis a
harmonious development of the economy-
energy-ecology triad.
Touching upon the need for new ecolo-
gical directions under the shadow of global
warming and depletion of traditional energy
resources, President Nazarbayev noted that
the 2017 Worlds Fair is to be held in Astana
under the theme Energy of the Future.
The coming recovery of the global
economy from the crisis will inevitably lead
to even more massive growth of produc-
tion and consumption, the president
warned. The transition to green energy
and the introduction of green technologies
is a growing vector of the global economy.
Despite possessing huge natural wealth,
including hydrocarbons, Kazakhstan is de-
termined to actively develop renewable
energy resources.
Notwithstanding all of these concerns
and warnings, President Nazarbayev said
he was confident that the world will not
plunge into a lasting recession and that it is
just a matter of fashioning a cohesive re-
sponse to fundamental global changes to
preserve harmony and improve the lives of
all people.
In his conclusion, he told the forum: The
21st century is taking its course, condensing
time and distance. The development of a
new type of global economy, new principles
of international relations and new values of
social life are under way. Therefore, today it
is important to find the right solutions to
global problems.
CHARLES van der LEEUW
In the 21st
century, the world
needs a new
economic model.
It should be
based primarily
on a fair and just
global financial
system
A
S
T
A
N
A
E
C
O
N
O
M
IC
F
O
R
U
M
Kazakhstan on the world stage
Astana Economic Forum
Kazakhstan on the world stage: Astana Economic Forumwas produced by the IHT
Creative Solutions department and did not involve the newspapers reporting or editorial
departments. It was sponsored by the Economic Research Institute JSC and the display
advertiser. Text by CHARLES VAN DER LEEUW and JOE URBANAS.
S
.
B
O
N
D
A
R
E
N
K
O
,
B
.
O
T
A
R
B
A
Y
E
V
A
S
T
A
N
A
E
C
O
N
O
M
IC
F
O
R
U
M
INTERNATIONAL HERALD TRIBUNE 10 | TUESDAY, JULY 2, 2013
. . . .
ADVERTISING SUPPLEMENT
Kazakhstan on the world stage
Astana Economic Forum
The Astana Economic Forums G-Global recommendations for G-20 leaders
T
he world economy after the crisis con-
tinues to face a number of problems.
To resolve the situation, it is neces-
sary to coordinate the response of the
Group of 20 governments in order to ensure
the sustainability of the recovery of the glob-
al economy.
We, the participants of the Astana Eco-
nomic Forum, welcome the initiative of the
Russian Federation to host the oncoming
G-20 summit. The Astana forum in substan-
tial sense becomes a proponent of a wide
Eurasian vision of the problems of global
development.
We have discussed the issues and chal-
lenges of global development and stimulat-
ing new economic growth as well as other
key issues on the G-20 summits agenda.
Over 10,000 participants attended the
Astana Economic Forum, including represen-
tatives of international institutions (theUnited
Nations, the International Monetary Fund, the
World Bank, the Asian Development Bank,
the European Bank for Reconstruction and
Development, among others), government
officials, Nobel laureates and representa-
tives of expert and business communities.
The new format of dialogue within the
framework of the Astana forum, called the
G-Global, received broad support. Since its
inception in January 2012, this Internet plat-
formhas been visited by more than 3 million
people from 160 countries.
We are offering the following recom-
mendations to the G-20 leaders, taking into
account the suggestions of participants in
the Astana Economic Forum and the free In-
ternet community. These recommendations
were developed in accordance with the
framework of the 2013 G-20 summit.
I. EFFECTIVE REGULATION
FOR ECONOMIC GROWTH
The main directions of effective regula-
tion are linked to the reformation of financial
regulation, strengthening multilateral trade
and ensuring the sustainable development
of energy markets.
In order toensure the stability of the post-
crisis recovery of the global economy, G-20
should contribute to the creation of a unified
system of global financial regulation. Such a
systemshould ensure an optimal balance of
restrictive and stimulating measures in order
to ensure stable development.
Reforming financial regulation
and supervision
Recommendation 1: It is necessary to
stabilize each national economy while
minimizing the negative spillover effects
of the national macroeconomic policies
on the rest of the world.
In this context, coordination of monetary
policies in the G-20 should remain one of the
main directions of international cooperation.
Recommendation 2: Both developed
anddevelopingcountriesneedtofindsolu-
tions to problems of global imbalances.
Large developing countries with perma-
nent current account surpluses are moving
toward expansionary macro policies in order
to sustain economic growth. In this case, the
governments of these countries need to as-
sess the impact of investment decisions in
order to reduce the potential risks of internal
imbalances.
Developed countries with a constant cur-
rent account deficit should decrease expen-
ditures, without decreasing investments in
research or physical and human capital.
Recommendation 3: The national and
regional regulation and supervision of fi-
nancial institutions should be based on
similar principles and concepts in order
to facilitate coordination and avoid regu-
latory arbitrage.
International associations of regulators
such as the Financial Stability Forum, the
Bank for International Settlements, the Inter-
national Organization of Securities Commis-
sions and the International Association of In-
suranceSupervisors must expandcollegiality
in decision-making and harmonize concepts
in the area of financial regulation.
Recommendation 4: Developed coun-
tries should evaluate and minimize the
risks of the discontinuation of programs
of quantitative easing.
To date, quantitative-easing programs
have played their part, giving impetus to eco-
nomic growth in some developed countries.
In this regard, the G-20 is advised to assess
thelong-termeffects of thediscontinuationof
these unprecedented anticrisis programs.
Recommendation 5: Governments
should regulate and supervise the shad-
ow banking sector.
Despite attempts to regulate the shad-
ow banking sector (hedge funds, private
equity investment, investment banking,
money market funds, primary dealers of
government bond markets, etc.), it contin-
ues to expand its scope. In this context, the
question remains as to whether Basel III
standards should be extended and applied
to this part of the financial sector.
Recommendation 6: Develop inter-
national standards for ranking and rating
agencies.
In order to reduce systemic distortions in
risk evaluation of the assets in favor of cer-
taincountries, it is necessary todevelopinter-
national rating standards and standards for
rating agencies, as well as to provide uniform
international regulation of rating agencies.
Strengthening international trade
Recommendation 7: Complete the ne-
gotiations of the Doha Round of the
World Trade Organization.
We once again appeal to bring the ques-
tion raised 12 years ago to its logical
conclusion.
Recommendation 8: Establishment of
specialized commissions on legal settle-
ment of transit policies is needed not only
at the regional level, but also on a global
scale. This issue is of utmost importance for
landlocked countries.
Recommendation 9: Ensuring fair and
equal competition on international agri-
cultural markets.
Recommendation 10: Further inte-
gration of countries into a variety of re-
gional groups/free economic zones/other
associations that allow free trade and other
favorable conditions is highly desirable and,
in some cases, the best possible way to re-
cover from the crisis.
In these circumstances, the G-20 coun-
tries are encouraged to advise countries on
the institutional design of flexible and open
regional trade associations.
Recommendation 11: Support the
G-20 initiatives to counter protection-
ismin international trade.
We welcome the initiative of the G-20
countries to impose a moratorium on new
protectionist measures in international
trade until the end of 2014 and propose to
extend it until the end of 2015.
Stable development of energy markets
Recommendation 12: Transition to a
green economy.
To achieve a transition to a green econo-
my, we need effective coordination between
countries, international and regional organi-
zations, nongovernmental organizations,
businesses and institutions.
Recommendation 13: Register green
products.
Agreements among the World Trade Or-
ganization, the United Nations Conference
on Trade and Development, the Internation-
al Chamber of Commerce, the European Un-
ion, the North American Free Trade Agree-
ment countries, the Asia-Pacific Economic
Cooperation forum and the Association of
Southeast Asian Nations on the develop-
ment of green trade and removing trade bar-
riers should be reached.
Recommendation 14: Invest in infra-
structure for sustainable development.
We support increased government in-
vestment in sustainable development of in-
frastructure (including public transport, re-
newable energy and energy-efficient
buildings) and natural capital to maintain
and increase its capabilities.
Institutional investors such as pension
funds and sovereign wealth funds to date
have accumulated more than $1 trillion in
total. Channeling even avery small portion of
this amount could have a tremendous posi-
tive impact on sustainable development.
To encourage investment and to in-
crease the capacities of alternative energy,
countries must enhance cooperation on the
development of appropriate financial instru-
ments. In this regard, G-20 countries sup-
port of the idea for a green climate fund for
developing countries is advisable.
Recommendation 15: Establish a
G-Global energy club as an institute to
prepare outreach events on the issues of
clean energy in preparation for Expo
2017.
Interaction within the framework of this
club would allow participating states to work
together to address such pressing issues as:

optimization of energy policy and coordi-

nation of long-term energy strategies;

development of common mechanisms

for the implementation of energy policies;

development and implementation of col-

lective energy security policies;

arrangement of agreed positions and ac-

tions on the global energy market (the for-
mation of a common energy diplomacy);

development of transit infrastructure,

transport and communications;

innovation and coordination of invest-

ment policies of member countries.
Recommendation 16: Develop a new
model of agreements on corporate re-
source management of ecosystems with
equity participation of capital in the
growth of local economies.
The G-20 should help promote a new
type of enterprise resource management of
ecosystems through public-private partner-
ships and concessions.
II. INVESTMENT FOR ECONOMIC GROWTH
AND EMPLOYMENT
One of the most obvious consequences
of the global economic and financial crisis
has been a significant decline in the various
types of investments, especially noticeable
in developed countries.
To resolve the problems of increasing
D
uring the Astana Economic Forum
and its sideline conferences, both
Prime Minister Serik Akhmetov of
Kazakhstan and Grigory Marchenko, the
governor of the National Bank of Kazakh-
stan, its central bank, touched upon region-
al and global cooperation among nations
and the streamlining of monetary and mac-
roeconomic policies in the face of todays
social, environmental, financial and eco-
nomic challenges.
According to the prime
minister, Astana can play an
exemplary role as the devel-
oping new capital of Kazakh-
stan, and its function as a
venue for crucial preparatory
work by international think
tanks for the worlds top de-
cision-makers marks its place
as a center for work on global
economic development.
Speaking at the Fourth In-
ternational Investment Forum, a sideline
conference, under the theme Astana In-
vest, Akhmetov told his audience: Overall,
Astana [and its] agglomeration have signifi-
cant potential to emerge as an international
center of competitive products and ser-
vices: education, health, tourism, innovation
and others. In this regard, the capital needs
modern technology, which should be direct-
ed primarily at energy conservation, the de-
velopment of a green economy and the
transfer of modern technology solutions.
As you know, in 2017 Astana will host
the international exhibition called Expo
2017, whose topic has been defined as the
development of future energy. It is expected
that participants at the exhibition will be
fromcountries representing the 100 largest
economies in the world, and millions of
people are expected to visit the exhibition.
Of course, this event will contribute to a sig-
nificant influx of investment, the implemen-
tation of major new projects and new envir-
onmentally friendly production.
At the forums final session, Leaders
Dialogue, within the G-Global World An-
ticrisis Conference, Akhmetov called the
event an adequate form of all-around dia-
logue on key issues of the modern
agenda.
The global financial crisis has shown the
need to jointly address maintaining global
economic stability and sustainability, the
prime minister remarked. The basis for the
solution of the complex issues and chal-
lenges of our time must be
broad-based dialogue and in-
teraction. We welcome all
measures taken at interna-
tional levels to promote
stable development of the
world economy, restore confi-
dence in the markets and re-
duce financial vulnerability. In
particular, such systematic
efforts made by member
states of the G-20, BRICS and
the Asian Partnership are for
strengthening financial stability and reduc-
ing export imbalances. BRICS refers to the
emerging large economies of Brazil, Russia,
India, China and South Africa.
Among Kazakhstans immediate priorit-
ies as part of its role in regional and eventu-
ally global integration is the Customs Union
with Russia and Belarus, which is poised to
unite in a single economic area called the
Eurasian Economic Union. Marchenko
stressed during the Astana Economic Forum
the need for a joint financial-regulation and
policy-enforcement agency, which he wishes
to be established in Kazakhstan.
We need to build the structure of a
single financial institution potentially capa-
ble of functioning effectively and able to
counteract the problems of the financial
markets arising in a period of crisis,
Marchenko observed in one of his panel
contributions. For instance, the issues of
countercyclical policy are a matter of de-
bate. Therefore, the agreements that have
been signed by the presidents of the three
countries stipulate that there should be a
become successful entrepreneurs but do
not have the business education and capital
to build their own businesses. Governments
and social partners should create an envir-
onment that will enable young people to real-
ize their business ideas and minimize errors.
Recommendation 8: Flexibility of the
labor market.
Flexible labor allows better use of work
time and production capacity, provides an
opportunity to adapt to changing conditions
and allows workers to transition from one
form of employment to another.
Recommendation 9: Implement ac-
tive employment policies.
It is necessary to carry out deep structur-
al reforms and to introduce a variety of
strategies (promoting entrepreneurship and
innovation through the creation of special
educational programs and business incubat-
ors) for the employment of the most vulner-
able segments of the population, especially
young people. The rise in youth unemploy-
ment can lead to the risk of a so-called lost
generation. This requires an effective sys-
tem to support the development of human
capital, on both global and national levels.
Recommendation 10: Resolve the
problems of the labor market associated
with the demographic situation.
The demographic problems associated
with the aging of the population in many
countries, including the G-20 countries, may
have a negative impact on the economic
and social systems of these countries. To
resolve this systemic problem, G-20 coun-
tries need to change the retirement age to
stabilize the dependency ratio, promote di-
verse approaches to the pension system,
adapt immigration policies to the labor mar-
ket, stimulate the birth rate and reduce child
mortality rates.
Recommendation 11: Review sover-
eign-rating indicators.
Sovereign-rating indicators that reflect
the quality of social progress are becoming
more important. Indicators that reflect the
social status of the population should be
considered alongside well-known macro-
economic indicators of national economic
development (gross domestic product, eco-
nomic growth, etc.).
Employment of vulnerable groups
Recommendation 12: Promote em-
ployment of people of preretirement and
retirement age, women and people with
disabilities.
To provide employment for vulnerable
groups of the population it is necessary to
create an enabling environment and devel-
op new instruments to empower and en-
gage people of preretirement and retire-
ment age, women and disabled people. Free
business training, and favorable lending
conditions can be used as support tools.
International development assistance
Recommendation 13: Develop free
trade in means of production and tech-
nology.
G-20 countries are responsible for identi-
fying obstacles to the free flow of technol-
ogy, knowledge, capital goods and financial
capital across national boundaries and ne-
gotiating the removal of such barriers.
Recommendation 14: Develop and
implement international standards of liv-
ing of the population.
We call upon the G-20 to establish a
working group on the formation of interna-
tional standards of living of the population in
order to ensure access to basic goods. In-
clusive and balanced growth that improves
the welfare of all population groups should
be the basis of social policy in every country.
Recommendation 15: Define the UNs
Millennium Development Goals for the
period after 2015.
We urge the G-20 countries to reformu-
late the Millennium Development Goals with
a focus on resolving global debt problems.
Given the importance of resolving the debt
crisis in the euro zone, the mechanisms of
regulation must be legitimate and focused
on the priorities of human development.
Food-supply security
Recommendation 16: Develop and
approve a detailed plan of action to ad-
dress the world food problemat the G-20
Summit.
The goal is to increase food production
by 70 percent in the coming years in order to
feed people all over the world. This is a key
question for any country, and especially for
the G-20 countries, which account for 80
percent of world food production.
We need to ensure concerted action by
the Food and Agriculture Organization and
the World Health Organization to effectively
monitor thequality of foodanddevelopahar-
monized approach toforecasting balances in
the global and regional food markets.
Recommendation 17: Prevent ten-
sion in food markets through restricting
speculation in the prices of food
products.
To avoid spikes in food prices it is neces-
sary to deploy a network of independent
food exchange markets located in different
regions of the world.
Recommendation 18: Enhance con-
trol over the market of genetically modi-
fied products.
It is necessary to develop and, with the
assistance of the World Bank, to implement
a program of action addressing internation-
al standards in nanoengineering, genetic en-
gineering and cell technologies.
Financial literacy
Recommendation19: Developasystem
of free financial education for people of re-
tirement age, youth and entrepreneurs.
LEADERS DIALOGUE | Toward a common economic space
A need for regional economic and ecological cohesion
A lack of financial and economic literacy
in a large part of the population in emerging
markets limits the ability of people to make
effective decisions about their financial fu-
ture. Wide promotion of the foundations of
business and business culture through the
establishment of specialized courses and
workshops in schools and counseling cen-
ters for young people and aspiring entrepre-
neurs will enhance their ability to open,
maintain and develop businesses.
Recommendation 20: Increase use of
the Internet for the promotion of finan-
cial literacy.
We urge the G-20 countries to promote
distribution of information on financial liter-
acy for children and adults through the Inter-
net. This measure will reduce the risk of loss
for the population that uses financial
products and services, including the risk of
being involved in fraud schemes.
III. TRUST AND TRANSPARENCY
FOR ECONOMIC GROWTH
The latest global financial and economic
crisis has revealed the gaps and weak-
nesses of the international financial and
monetary system. At the same time, many
of the fundamental flaws of this system,
which led to the emergence of the global
economic crisis of 2008-09, have not been
addressed. These systemic weaknesses re-
quire the implementation of a large-scale
and fundamental reform of the global mon-
etary system.
Reforming the international monetary
and financial system
Recommendation 1: Further reform
the global monetary system.
The latest global financial and economic
crisis has shown that the existing system is
in need of a radical reform. Some steps in
this direction have already been taken, but
they are not sufficient. It is recommended to
continue gradual progress in this direction.
Recommendation 2: Raise responsi-
bility of the issuers of global reserve cur-
rencies.
It is essential to impose specific duties
on the issuers of global reserve currencies,
such as currency stability, through compli-
ance with certain restrictions on the size of
public debt and the balance of payment def-
icit, removal of foreign-exchange and trade
restrictions, and compliance with require-
ments on transparency of emission
mechanisms.
Recommendation 3: Continue the re-
form of international financial institu-
tions.
Over the past few years, there has been
clear progress in reforming international fi-
nancial institutions. We, for our part, fully
support what has been done and recom-
mend that the G-20 continue work in this
direction.
Recommendation 4: Coordinate re-
gional financial mechanisms.
Regional financial mechanisms are impor-
tant tools of the global financial architecture.
The main objective of RFMs is to support the
balanceof paymentsandbudget of participat-
ing countries, and reform their economies to
enhance resilience to global cataclysms. We
recommend better coordination between
RFMs and the IMF. This will allow more effi-
cient use of resources and reduce risks.
Recommendation 5: Develop a per-
manent body for global currency regula-
tion.
Sharp fluctuations in exchange rates, in-
cluding those of the so-called hard curren-
cies, have become a common occurrence in
recent years. The amplitude of such fluctu-
ations is growing while the influx of specula-
tive funds into the international currency
market and derivative financial instruments
is growing.
A permanent body for global manage-
ment and control should be created on the
basis of the board of central banks of the
G-20 countries to soothe volatility on foreign
exchange markets and provide opportuni-
ties to quickly and coherently respond to ex-
change-rate fluctuations.
Recommendation 6: Control external
debt.
We believe that global methods of rigid
borrowing control that would prevent quick
and unjustified increases in the size of the
external sovereign and corporate debt
should be found.
Recommendation 7: Tax international
financial transactions.
A tax on international financial transac-
tions could generate sufficient funds to cov-
er the financial costs of maintaining financial
stability and provide sufficient time to re-
store solvency through fiscal consolidation
and structural reforms.
Addressing corruption
Recommendation 8: Develop a sys-
temof international regulation of nation-
al anticorruption programs.
Recommendation 9: Promote best-
practice standards of responsible busi-
ness practices as a means of preventing
corruption.
Recommendation 10: We support the
implementation of the G-20 Anti-
corruption Action Plan for 2013-14.
The G-20 Working Group on Anti-
corruption can demonstrate a transparent
and inclusive approach by setting an ex-
ample. In particular, publication of the draft
recommendations with the possibility of
interactive discussion will attract experts of
global civil society in the process.
These recommendations were composed
based on the opinions and suggestions of
the participants and speakers at the sixth
Astana Economic Forum.
The global
financial crisis
has shown the
need to jointly
address
maintaining global
economic stability
and sustainability
single financial supervisory body and that it
should be in the territory of the Republic of
Kazakhstan.
The central bank governor noted that fric-
tions and discrepancies are making the task
of economic unification complicated despite
the three partners determination to push
ahead with it.
Ministries and the central banks of our
three countries hold regular discussions,
said Marchenko. We all Russia, Kazakh-
stan, Belarus have a lot to do for the de-
velopment of common approaches. These
tasks also require optimum consistency of
macroeconomic, financial, supervisory and
monetary policy. Despite the overall similar-
ities, there are differences in the develop-
ment of our economies.
Marchenko also stressed that, although
the plan for a single currency within the EEU
is not off the agenda, turning this idea into a
reality will be a long-term process and
should not be done in haste without every
effort to safeguard it and prevent difficulties
such as those occurring in the euro zone
today.
Marchenko concluded: According the
Maastricht Treaty, for example, inflation
should not be more than 2 percent per year,
and inflation in Belarus was 102 percent [in
2012]. In such a situation, we cannot speak
about a single monetary policy. Thus, we
must first understand what inflation rate we
consider acceptable, make this decision,
and then perform it for quite a long time.
CHARLES van der LEEUW
Prime Minister Serik Akhmetov of Kazakhstan called for investment in energy conservation, the
development of a green economy and technology transfer in Astana, the countrys capital.
A
S
T
A
N
A
E
C
O
N
O
M
IC
F
O
R
U
M
the volume and improving the efficiency of
investment funding, it is necessary to ana-
lyze public policy in this area, the role of pub-
lic-private partnerships and nontraditional
sources of long-term financing and to evalu-
ate opportunities to generate resources for
investment on the debt and equity markets
in the current conditions, as well as issues
related to foreign direct investment.
It is also worth noting that some coun-
tries suffer from underemployment, and un-
employment is still on the rise. At the same
time, in the context of globalization of the
global economy and the current level of civ-
ilization, the importance of human capital as
a factor of social and economic develop-
ment at the national, regional and transna-
tional level has been steadily increasing.
Financing investments
Recommendation 1: We propose in-
creasing investment in global agricultur-
al production and social protection, in-
cluding programs to help poor people gain
access to food, and reviewing existing
policies of some countries that encourage
alternative use of crops.
Recommendation 2: Every national
economyshouldencouragetheinvestment
necessary to implement available tech-
nologies at the highest possible speed.
Every nation of the world has the respon-
sibility to invest in its human resources and in
its infrastructure to unleash the entrepre-
neurial skills of its people and to create in-
vestment opportunities that will help imple-
ment the most efficient technologies in the
production of goods and delivery of services.
Recommendation 3: Develop a spe-
cial report on foreign direct investment.
Practice shows that foreign investment
in general dominates the natural resource
sector and real estate, which, given their
well-known unstable conditions, often are
subject to fluctuations.
That is why this issue needs a detailed
study. We hope that the G-20 will prepare a
special report on this subject in one of the
future working-group events and consider
its recommendations at the G-20 summit.
Recommendation 4: Promote the im-
plementation of state policy in support of
innovative cross-sectorial partnerships
for the development of entrepreneurship.
Governments should create favorable
conditions for small and medium-sized en-
terprises investments in innovation and
promote the development of cross-sectorial
partnerships in business.
Providing employment
Recommendation 5: Promote invest-
ments for job creation.
It is essential to stimulate private-sec-
tor development for the creation of produc-
tive jobs. Government policies should be
coherent and have predictable plans. Fi-
nancial reforms are needed to restore the
banking sector in terms of support for
investments and lending. Political leaders
need to focus on the growing problem of
youth unemployment.
Recommendation 6: Stimulate global
demand.
The growing consumer potential of the
middleclassindeveloping countriescanbean
important engine of global economic growth,
although the effects would not be immediate.
Recommendation 7: Promote youth
entrepreneurship and self-employment.
Young people often have the potential to
TUESDAY, JULY 2, 2013 | 11 THE GLOBAL EDITION OF THE NEW YORK TIMES
. . . .
ADVERTISING SUPPLEMENT
M
oney needs to be returned to its
function as a tool rather than be-
ing an end in itself and that
must occur on a global level rather than on
national levels. That was the core of the
message that a number of Nobel econom-
ics winners delivered at the Sixth Astana
Economic Forum, which included the first
G-Global World Anticrisis Con-
ference in late April.
In his presentation, Robert
Mundell, a 1999 Nobel winner,
argued that monetary imbal-
ances were a major cause of
the persistent crisis. The imbal-
ances, he said, have not disap-
peared, and he strongly advoc-
ated the creation and
consolidation of a coherent
global monetary regime. The
former chairman of the Federal Reserve
Board, Paul Volcker, argues that the global
economy needs a global currency, said Mun-
dell. That is one route to go.
He suggested the problem could be ad-
dressed at the upcoming G-20 summit in
September, which President Nursultan Naz-
arbayev of Kazakhstan has said he will at-
tend. I think that the G-20is ideally suited to
deal with that, because it contains both the
big countries and major smaller countries,
he explained.
Christopher Pissarides, a 2010 Nobel
laureate who teaches at the London School
of Economics, is the chairman of Cypruss
national council for economic policy. He said
that, for the euro zone countries, a single
banking regime and a single fiscal regime
are needed, along with massive economic
stimulation. As the European Union is com-
ing out of the debt crisis, it needs to prepare
for job-rich growth that will increase pro-
ductivity and bring back the unemployed into
jobs, he said. After years of austerity and
structural reform, Europe needs
new infrastructure programs.
These should be coordinated at
the E.U. level and be outside the
recurrent budget.
Pissarides urged further inte-
gration among European econo-
mies. The single market in
Europe has been good for jobs
and growth, he told the forum.
Trade expanded, the poorer
countries caught up and internal
migration removed bottlenecks. It is essen-
tial to complete the single market in ser-
vices, because this is where the future of
employment is in Europe. The single cur-
rency was a great idea as the next step in
European integration. But it backfired. It is
holding back growth and job creation.
Original ideas were expected and, in-
deed, came fromJohn Nash, who received a
Nobel in economics in 1994. In general,
said Nash, money has been associated in
the popular view with moral or ethical faults,
like greed, avarice, selfishness and lack of
charity. But on the other hand, the existence
of money often makes it easy to make valu-
able donations of philanthropic sorts, and
the parties receiving such contributions tend
to find it most helpful when the donations
are received as money.
He agreed that a stable monetary system
was necessary for businesses to fulfill their
role. He told the forum: My point is simply
that good reliability of the estimates of the fu-
ture value of a currency, a medium of ex-
change, is favorable for the formation of con-
tracts of a business-related variety. And the
general pattern, within a state or a zone of le-
gal customs and rules, becomes effectively
a part of business culture there. We can see
that, other things being equal, a more favor-
able business culture should be expected, at
least as long as we remain dependent on
private enterprise and entrepreneurs, if only
on a partial scale, to enhance economic pro-
gress and the effective value of the products
produced within the state or zone.
Another Nobel laureate (in 1996) who is
a regular at the Astana forum, James Mir-
rlees, urged action at the closing Dialogue
of Leaders session. Pay attention to what
is real, not what is financial, he said. Let
people go back to work. Let investment
flows be restored. Let countries of the world
get busy. We know what the solution is. It is
time to work on it.
Astana Anticrisis Declaration
The Nobel-winning economists remarks
echoed the Astana Anticrisis Declaration
filed at the closing session. The declaration
read, in part:
We, the nations of the world would
FOR JOBS AND GROWTH | Experts advice
Nobel laureates urge reform of international monetary system
ACADEMIA | Eurasian Higher Education Leaders Forum
Conference helps point Kazakhstans higher education toward the future
seek a review to assess whether current in-
stitutional and governance structures
remain conducive to conduct effective inter-
national economic policy coordination, co-
operation and dialogue. An action plan for
relevant reforms should be approved and
implemented in the short term.
We would welcome a reassessment of
whether there are credible alternative policy
options that would produce less disruptive
adjustment in the most affected euro zone
countries. Fiscal consolidation and austerity
measures in the long term can erode the
growth potential and bring an array of negat-
ive consequences.
Let countries
of the world
get busy.
We know what
the solution is.
It is time to
work on it
Nobel economics winners addressed the Astana Economic Forum. Clockwise from top left: Robert
Mundell, John Nash, James Mirrlees and Christopher Pissarides.
We commit to the development and
maintenance of long-term, sustainable, in-
clusive and balanced growth through closer
international cooperation, with growing par-
ticipation of emerging and developing mar-
ket economies as a reflection of new global
realities, in order to eradicate poverty and
continue to reduce global and domestic in-
come inequalities.
We commit to the correction of global
and domestic savings-investment imbal-
ances through more productive and equit-
able use of capital and increased diversific-
ation of reserve assets.
CHARLES van der LEEUW
Kazakhstan on the world stage
Astana Economic Forum
A
S
T
A
N
A
E
C
O
N
O
M
IC
F
O
R
U
M
K
azakhstan has embarked on a
sweeping effort to change its educa-
tional system. An annual conference
at its flagship Nazarbayev University is help-
ing educational leaders ensure the reformis
successful.
In welcoming those attending the second
annual Eurasian Higher Education Leaders
Forum, Deputy Prime Minister Yerbol Oryn-
bayev noted that Nazarbayev University has
become the experimental platform that is
allowing the state to reform existing univer-
sities and create new ones.
Following are some of the important
points that educational experts from
Kazakhstan and abroad made at the confer-
ence on June 12 and 13:
The competition for top faculty and stu-
dents is no longer confined within a coun-
trys borders but is international in scope,
said Michael Worton, a vice provost of Uni-
versity College London. In other words, Ka-
zakhstans universities are competing with
universities around the world for faculty and
students.
Universities do a better job if they have
autonomy the freedom to decide what
courses to offer, which managers to hire
and how to allocate their financial re-
sources said Mary Canning, a member
of Irelands Higher Education Authority. In
many countries, including Kazakhstan, a
government authority makes these de-
cisions, although Kazakhstan is moving
toward autonomy.
Universities that rely mostly on govern-
ment funding, as most do in Kazakhstan,
need to develop other funding sources, said
Stephen Heyneman, an expert in university
management and a professor at Vanderbilt
University in Tennessee. Much of the
budgets of the worlds best universities
come from nongovernment sources, he
said. To obtain a substantial amount of non-
government funding, Kazakhstan needs to
develop an educational-philanthropy cul-
ture, according to Aslan Sarinzhipov, who
helped start Nazarbayev University and is
chairman of the NU executive council.
Universities should be accredited by an
independent agency and not by the govern-
ment, Canning said. Kazakhstan is moving
toward an independent accrediting body.
The government should award research
contracts to universities through open bid-
ding, Heyneman contended. Most research
in Kazakhstan and elsewhere in the
former Soviet Union has been done by in-
dependent research institutes. Those or-
ganizations siphon off money that could
strengthen universities, Heyneman said. Ka-
zakhstan is taking steps to funnel more re-
search funding to universities.
Universities should have shared gov-
ernance, according to Richard Miller, presi-
dent of Franklin W. Olin College of Engineer-
ing in Massachusetts. Among other things,
this means an independent board of trust-
ees that oversees what the universitys
management team does.
Kazakhstans Bolashak Program, which
for more than two decades has sent talented
young people abroad for bachelors, mas-
ters and doctoral degrees, will be assuming
an additional role: helping foster student mo-
bility, according to Kadisha Dairova, Nazar-
bayev Universitys vice president for student
affairs and international cooperation, and
Sayasat Nurbek, president of the education
ministrys Center for International Programs.
Student mobility is an objective of the Bo-
logna Process on higher education, which
many European universities follow. This in-
volves sending students overseas for a
semester or two, then having themreturn to
their home universities to graduate. This
gives students the international experience
valued by employers.
The issues of quality control to ensure ex-
cellence in teaching and research, and of uni-
versity autonomy, came up in several panel
proceedings at the conference, whose gener-
al sessions were moderated by Nazarbayev
Universitys president, Shigeo Katsu.
A key to becoming a world-class universi-
ty is developing an effective quality-control
system, according to Tom Boland, head of
Irelands Higher Education Authority. Boland
maintained that the primary responsibility
for quality control should rest with universi-
ties, not a government agency. Govern-
ments role in quality control should be to
make sure universities take their responsi-
bility seriously, he said. The quality control
process should include students, he said,
since they are the primary consumers of a
universitys services.
When Nazarbayev University was foun-
ded three years ago, Parliament passed a
law granting it autonomy. One of the man-
dates of the university was to spearhead
educational innovation in the country.
To do that effectively, it needed autonomy,
its founders argued.
Other universities have long had to follow
curriculum guidelines and other policies of
Kazakhstans Ministry of Education and Sci-
ence but that is changing. Every universi-
ty will have autonomy by 2016, said Fatima
Zhakypova, who heads the ministrys higher-
education department.
The autonomy initiative, as well as many
of Kazakhstans other educational reforms,
have been driven by the education minister,
Bakytzhan Zhumagulov, who has been in his
post more than two years. Zhumagulov, who
gave the keynote address at the confer-
ence, is known as a government leader who
gets things done. He has lived up to that
reputation by setting a rapid pace for the
comprehensive reform of Kazakhstans
educational system, from preschool to
graduate school. He outlined the latest initia-
tives in his keynote address.
Just two years after President Nursultan
Nazarbayev directed that all higher-education
institutions be granted autonomy, they are
already formulating their own courses and
choosing their own vice presidents and prov-
osts, Zhakypova noted. The Ministry of Edu-
cation used to fill those positions. I believe
that when our universities are fully financially
autonomous, they will be in position to be-
come elite institutions, she said. Kazakhstan
hopes to have two universities in the worlds
top 100 in the next decade or two.
JOE URBANAS
At the Eurasian Higher Education Leaders Forum at Nazarbayev University, June 12-13, from left to right: Shigeo Katsu, president of Nazarbayev University; Deputy
Prime Minister Yerbol Orynbayev of Kazakhstan; Bakhytzhan Zhumagulov, education minister; and Richard Miller, president of Franklin W. Olin College of Engineering.
N
A
Z
A
R
B
A
Y
E
V
U
N
IV
E
R
S
IT
Y
12 | TUESDAY, JULY 2, 2013 INTERNATIONAL HERALD TRIBUNE
. . . .
0=KJA +KJKHA
SUZY MENKES special report
SCHIAPARELLI
Diors global vision
ATELIER VERSACE
PARIS I was asked for my vision of
Schiaparelli, and I feel so far from cou-
ture, said Christian Lacroix, holding a
Schiap lobster hat beside the first
fashion creations he has done since his
house was shuttered four years ago and
he turned to stage costumes.
But in this current Paris autumn 2013
season, the one-time couturier has cre-
ated a fusion of his own shapely silhou-
ettes, joyful colors and intense embel-
lishment with the ideas of Elsa
Schiaparelli, the surrealist designer of
the 1930s.
A carousel spun Monday to show the
Lacroix interpretations from a scar-
let military jacket with jet embroidery;
through a peach hip-line pouffe over a
goats fur skirt; to a dress in shocking
pink, the color that Schiap invented.
Since the house of SCHIAPARELLI was
bought in 2006 by the Italian luxury en-
trepreneur Diego Della Valle, it has
beena sleeping beauty. Mr. Lacroixs in-
volvement, for just one season, is de-
signed to buff up the brand, by showing
an 18-piece collection at the Muse des
Arts Dcoratifs in Paris. The same op-
portunity will be offered annually to dif-
ferent artists, and a full-time designer
will soon be appointed.
But nobody, not even Mr. Della Valle
himself, questioned on Sunday, knows
how the Schiap/Lacroix story will un-
fold, although a taut purple jacket with
narrow blue pants could walk right out
in the Paris streets, even with its grass-
green taffeta neckpiece.
It was a joy to see again Mr. Lacroixs
intense, painterly shades and how he
canturnblackinto a color withshards of
decoration and nuances of light. Schiap
embroideries from the Lesage archives
were used deftly as embellishment.
Mr. Lacroix is adamant that fashion is
behind him and that costumes are now
his fashion. But I swear that without
Schiap I would never have done couture
because everything in her work was in-
spirational for me: the colors, shapes
and her way of using the past, he said.
This is my homage. SUZYMENKES
Lacroix and Schiap
Christian Lacroix,
who moved on to
stage costume
design when his
fashion house
closed four years
ago, has created a
one-time couture
collection for the
house of
Schiaparelli.
CHRISTIAN DIOR
PARIS The models were laughing, the
flowers were blooming and although
Kanye Wests aggressive rap music
with its mean lyrics was still pulsating,
all seemed right with CHRISTIAN DIORs
haute couture world.
But this version of the show Monday,
at the start of the Paris autumn2013 cou-
ture week, was a digitalizedvisionen-
hanced reality fromthe catwalk created
almost instantly by four iconic photo-
graphers: Patrick Demarchelier repre-
senting Europe; Willy Vanderperre for
the Americas; Paolo Roversi for Asia
and Terry Richardson for Africa.
They all had snapped the models off
stage andpostedthe pictures onthe sur-
rounding walls, where the projections
includedamemorystickof floral images
that the designer Raf Simons used in his
first Dior couture showjust a year ago.
The sense of place was crucial to the
story: the United States, sporty; Asia,
traditional purity; Africa: the freedom
of the colorful Masai, and Paris, Christi-
an Diors historic Parisienne.
It sounds like a lot to digest. And it
was, as if the designer had attached
various, swinging pieces of fabric and
there were plenty to a global wheel.
Here came Paris, a variation on tweed
suits with sheer, shiny covers; there
was Africa, all fiery red and deep blue,
marked by tiny pebbles of embroidery;
then the Zen of Asia: pallid dresses,
with fluid shapes and drapes.
Throughout there was a sense of the
undefined: waves of fabric, jackets
looped loosely around the shoulders,
and almost every outfit with three or
four different materials say a
flowered bodice with drapes at the hips
and light mesh material around the
knees. Transparency was ever present,
including a bare body seen through a
sheer curtain of fabric.
Did this ambitious, artistically led col-
lection work? Not always. There were
complications right through the collec-
tion, mostly because of this chosen path
of mixing and melding different fabrics.
The one constant was the fabulous qual-
ity of workmanship from the Dior
ateliers.
Perhaps the intensity and density
was to reiterate what Mr. Simons said
before the show: I am not a minimal-
ist. Although there could have been
much more of the few simple evening
gowns that looked international and
timeless, yet modern.
Yet Mr. Simons, even when he missed
the beat, is right to push for something
that moves beyond Diors Parisian her-
itage. He is picking up on the cultural
and global changes that put Asian cli-
ents in key front-row positions in Diors
showtent.
Old style couture is literally dying:
Jean-Louis Scherrer and Grard Pipart
of Nina Ricci both passed away last
month. And Dior needs a designer who
will look not only at the storied history
but also embrace the future even if
Mr. Simons has some way to go before
he makes his vision as clear as those im-
ages projected on the walls.
Naomi Campbell, the glamour-puss
super model, opened and closed the
ATELIER VERSACE show, bringing to the
catwalk the lacy, racy, high-paced style
that belongs to Donatella Versace.
I want everything perfect: the fab-
rics, the furs, the finest photographers
like Horst and Man Ray, said Ms. Ver-
sace backstage, joshing with Ms. Camp-
bell, both in black lace with peekaboo
openings on the body.
She might have added the perfect
body, for the models sashayed down
the catwalk, their skin bared at key
points, through a lacy, visible bra, or an
open back. There were other gorgeous
skins, like the wine red crocodile coat or
a sky blue fur, where a curving slit of na-
kedness created a sensuous path.
That conceal-and-reveal element was
abundant. And so was the work with fab-
rics. Thesmallest slipseemeddensewith
adornment, like the scattering of tiny se-
quins that might trace the open slits.
You have to admire the way that Ver-
sace canrebranditself eachseason. And
the return of the couture line to the run-
way was an excuse to show some of the
bling that had been toned down in the
show: the Versace high jewelry collec-
tion. And it doesnt get much higher
than that. SUZYMENKES
PARIS With pants clinging from a high
waist, around the groin, over pin-thin
thighs and on in a lightning streak of
shiny leather to pointed shoes, the SAINT
LAURENT show was a triumph of teen-
scene sexual swagger.
The designer Hedi Slimane, with the
accent on slim, went back to his pipe-
cleaner silhouette at Dior Homme that
set the mens wear tone for the newmil-
lennium. But for Saint Laurent, Mr. Sli-
mane brought his new passion for
downtown Los Angeles. The result was
a hit not the fashion shock wave of his
first time around, but a powerful mes-
sage to end the Paris mens wear sea-
son, which was filled with oversized
sportswear.
Saint Laurent was no reality check.
You would have to be a thrusting, super-
skinny teenager to wear the clothes as
they were shown. The dark set, illumin-
ated with strobe lights that rose up elec-
tronically on pillars beside the runway,
welcomed this gang of hot-blooded he-
roes, hair swept back, thin hips pulsat-
ing, shoes with exaggerated points.
But the tailoring was terrific: jackets,
perhaps with shiny leather tuxedo
lapels or with a sharp motif running
down the backbone. That silhouette
might be extended to a coat, or bulked
up with a blouson top. Just once, the
pants swelled at the thighs into jodhpur
cool.
After two seasons of a grungy, casual
wardrobe, this show sharpened up Mr.
Slimanes message and the image of
21st-century Saint Laurent. SUZYMENKES
A lesson
in sexual
swagger
ONLINE: MENS WEAR IN PARIS
The end of the summer 2014 shows.
global.nytimes.com/style
SAINT LAURENT
CATWALKING
CHIC ON THE BRIDGE - NEW YORK
Sold exclusively in Louis Vuitton stores and on louisvuitton.com.
TUESDAY, JULY 2, 2013 | 13 THE GLOBAL EDITION OF THE NEW YORK TIMES
. . . .
Culture
exhibitions art
PHOTOGRAPHS BY BIBI NEURAY
AMSTERDAM
BY NINA SIEGAL
On Jan. 1, 1738, the Dutch West India
Company slave ship Leusden, carrying
nearly 700 African men, women and
children through Surinam, got caught in
a terrible storm. Fearing that the cap-
tives would scramble for the few life-
boats, the captain ordered the crew to
shut the ships hold and lock the Afri-
cans belowdeck.
Six hundred and sixty-four people
were suffocated or drowned while the
boat sank and the crew escaped. It was
the greatest tragedy of its kind in the At-
lantic slavetrade, thehistorianLeoBalai
said, with a death toll almost five times
that of the next largest: the massacre of
132 slaves on the Zong, a British-owned
ship that was transporting slaves from
Africa to Jamaica in 1781. They were
thrown overboard for insurance money.
The story of the Leusden was never
told in Holland, Mr. Balai said. It was
the largest murder case in the history of
the slave trade, but no one ever talked
about it.
It is nowthe subject of an exhibition at
the Scheepvaart Museum, the maritime
history museum here. The interactive
exhibition takes visitors below deck on
the ship before taking them above deck
tomeet thecaptainandother peoplewho
benefited fromthe Atlantic slave trade.
The four-room exhibition is based on
a Ph.D. thesis that Mr. Balai, who is Sur-
inamese Dutch and whose ancestors
were enslaved, published in 2011, result-
ing from five years of research in the
Dutch national archives in The Hague.
If you look for a list of shipping dis-
asters in Dutch history you wont find
it, said Remmelt Daalder, a senior cur-
ator at the Scheepvaart Museum. Why
not?It wasnt seenas important. It was
alarge loss interms of money, but no one
seemedto mindthat it was a large loss in
human lives. No one was punished, and
in fact, some of the crew members got a
reward because they were able to save a
box of gold fromthe ship.
The exhibitionopened last week to co-
incide with the commemoration of the
official end of slavery in the Dutch
colonies, which took place 150 years ago
on July 1, 1863. Although slaves were
never brought to the Netherlands,
Dutch merchants played an important
role in the maritime triangular trade
fromthe 17thto the 19thcentury, captur-
ing people fromthe West Coast of Africa
and shipping them through its colonies
in the Caribbean to the Americas.
The Dutch West India Company alone
shippedabout half amillionpeople tothe
American continent and shipping back
the fruits of their labor sugar and to-
bacco, for example fromthe 1670s un-
til about 1740. The Leusden was the first
West India Company ship that was spe-
cifically designed for transporting
slaves, Mr. Balai said. Other slave ships
were merely cargo ships that were
converted for the purpose. It made 10
trans-Atlantic voyages, carrying from
500 to 700 Africans on each trip.
As the Dutch commemorate the 150th
anniversary of the abolition of slavery,
however, some say that theres still in-
sufficient acknowledgment of the role
the country played in the trade, or of the
toll it has taken on the lives of its people.
In the past five years, leading up to this
commemoration, a number of Surin-
amese groups andothers who represent
people from the former Dutch colonies
have been demanding that the govern-
ment formally apologize.
On Monday in Oosterpark in Amster-
dam at the Keti Koti Festival, which cel-
ebrates the abolition of slavery, many
had been hoping that Willem-Alexander,
thenewDutchking, wouldissueaformal
apology, but he decided not to speak at
all. Instead, LodewijkAsscher, theDutch
deputy prime minister expressed the
governments deep regret and re-
morse over slavery.
It is a day to commemorate the vic-
tims and to dwell on one of the most
painful periods of our history, he saidin
his speech. Many people are still bear-
ing that pain. Whoever our forebears
were, whether victimor perpetrator, we
are united in our perplexity of this de-
grading practice of slavery. How did
people dare think that they had a right
to treat others as their property? Why
did the Netherlands not put an end to
this much sooner?
I standhere inthe name of the Dutch
government, and I look back at this
stain on our history. I look back and ex-
press deep remorse.
SandewHira, an economist and histo-
rian, has been an advocate for an official
apology. The Dutch glorify the 17th
century and call it the Golden Age, he
saidlast week. But inthat centurythey
were kidnapping hundreds of thou-
sands of people from Africa and tortur-
ing them and forcing them to work for
free in the colonies, in what wed now
call forced labor camps.
On June 13, the Dutch Council of
Churches issued a formal apology for
slavery, and its secretary general, Klaas
van der Kamp, called it a black holo-
caust. Hundreds of thousands of
people were removed fromtheir homes,
exploited and forced to spend a lifetime
in captivity, the statement says. As
churches we recognize our part in this
shameful past and we must conclude
that theology was abused in certain cir-
cumstances to justify slavery.
The deputy mayor of Amsterdam, An-
dre van Es, said the city doesnt want
to overlook its role in the slave trade.
When I was in school no one told me
about slave trade history, she said.
There is a lack of knowledge and also
the Dutch are not very good at looking
into the black pages of their history.
There is a kind of taboo. People say, Oh,
it was 150 years ago, generations ago,
we have to look at the future. In a way
that is true. You cant stay a prisoner of
ESTATE OF GEORGE GROSZ/LICENSED BY VAGA, NEW YORK; MUSEUM OF MODERN ART
George Grosz said of The Poet Max Herrmann-Neisse that it was stolen from me.
BY PATRICIA COHEN
Not until 1998, when 44 nations includ-
ingthe UnitedStates signedthe ground-
breaking Washington Principles on
Nazi-Confiscated Art, did governments
and museums formally embrace the
idea that they have a special responsi-
bility to repair the damage caused by
the wholesale looting of art owned by
Jews during the Third Reichs reign.
Now, 15 years later, historians, legal
experts and Jewish groups say that
some museums in the United States
have backtracked on their pledge to
settle Holocaust recovery claims on the
merits, and have resorted instead to le-
gal and other tactics to block survivors
or their heirs frompursuing claims.
In recent years judges have dis-
missed several cases after museums ar-
gued that recovery claims had been
filed too late. California legislators were
so disturbed by one blocked claimthere
that they passed a law in 2010 to help
Nazi-era (and other) claimants avoid
tripping over legal deadlines.
In some of the cases, museums like
the Detroit Institute of Arts, the Toledo
Museum of Art in Ohio, the Museum of
Fine Arts in Boston and the Solomon R.
Guggenheim Museum have tried to de-
ter claimants fromfiling suit by beating
them to the courthouse and asking
judges to declare the museums the
rightful owners.
Critics also charge that museums
have not followed their own guidelines,
which urge themto be forthcoming with
provenance information that could help
people trace the history of a contested
work of art.
The response of museums has really
been lamentable, said Jonathan Petro-
poulos, the former research director for
art and cultural property for the Presi-
dential Advisory Commission on Holo-
caust Assets, who has been hired by
claimants to do research. It is now so
daunting for an heir to go forward.
The question of whether museums
are decidingclaims onthe merits has re-
cently been pushed to center stage
again by a series of law journal articles,
legal forums and rulings in the United
States and abroad. At stake in this emo-
tional debate are the fate of valuable
works of art, the reputations of elite cul-
tural institutions and the legal issue of
whether the American judicial system
is capable of addressing restitution
claims.
Both the Association of Art Museum
Directors and the American Alliance of
Museums insist that their members
consistently follow ethical guidelines
requiring themto respond quickly and
scrupulously to restitution requests.
Christine Anagnos, executive direc-
tor of the museumdirectors association,
said its members were committed to
resolving questions about the status of
objects in their custody. Most cases,
she said, are resolved through negoti-
ation before claimants feel compelled to
file suit.
Museumofficials also say they turn to
procedural tactics like invoking time
limits only after they have carefully re-
searcheda claimandconcludedthat it is
unfounded.
But Stuart E. Eizenstat, a former spe-
cial State Department envoy who nego-
tiated the Washington Principles, said
museums have adopted a harder line in
the past seven years or so, partly in re-
sponse to some court victories by art in-
stitutions and waning pressure fromthe
government.
The essence of the Washington Prin-
ciples comes down to one sentence, he
said. Let decisions be made on the
merits of the case rather than technical
defenses.
No one disputes that, even with data-
bases that list looted art, it takes consid-
erable effort and money to track art-
works from Nazi-occupied countries,
which typically have gaping holes in
their provenance.
There is also agreement that not all
claims are valid, which requires that
museum directors respond cautiously
to safeguard their collections.
Simon J. Frankel, a lawyer who has
represented the Museumof Fine Arts in
Boston, pointed out in a recent lawjour-
nal article that since 2010, when the mu-
seum went to court to block a Nazi-era
Buried crime of the slave trade
U.S. museums faulted on restitution of Nazi-looted art
your past, but to move forwardyouhave
to look into the past.
That is changingnow, she said, as Am-
sterdam celebrates the 400th an-
niversary of its Canal Belt, built, in part,
withmoneyearnedfromthe slave trade.
We are very proud of our history and
we also acknowledge that some of this
wealth was earned by the trade in
people, andalso the labor of slaves inthe
colonies, and that is what makes it more
important for us to commemorate.
Although there is plenty of documen-
tary evidence about the history of the
slave ship Leusden in the archives, no
objects survived no model of the ship,
no construction plans, no material
owned by the crew.
The exhibition at the Maritime Mu-
seum, created by a theater set designer,
relies on the experience of being inside a
replica of the ship to engage visitors.
While they are in the dark hold, visitors
will hear fearful voices asking where
they are headed and why they are being
held captive. Paper tags hang from the
ceiling, scribbled with the names, ages
and dates of capture of the Africans on
board names from the West India
Company archives. In the final room,
those nametags become gravestones,
with faces of real people in place of the
data to convey the true human toll.
Our idea was that we wanted people
to gradually understand the ins and
outs of the slave and especially the fate
of the people on board the Leusden,
said Mr. Daalder. It has been com-
pared to C.S.I. were starting the
search for the Leusden, and investigat-
ing it as a crime.
To continue with his research on the
Leusden, Mr. Balai will travel to Surin-
am this summer with marine archeolo-
gists to search for the wreck. Theyll be
looking for it in the Maroni River, at the
border of Surinam and French Guiana.
We hope we can find something, or
some materials, because its veryimpor-
tant to knowhowthe shipwas built, Mr.
Balai said. Its also a mass grave be-
cause 664 people lost their lives there.
From top: At the
Scheepvaart Mu-
seum in Amster-
dam, a re-creation
of the lower deck
of the slave ship
Leusden designed
to mimic the sense
of being held pris-
oner there; a rep-
lica of the ship,
which confronted
a terrible storm
off Surinam and
sank in 1738; and
an open and spa-
cious upper deck
made comfortable
for the crew.
ONLINE: THE CULTURE AT LARGE
Up-to-the-minute news and reviews on
the ArtsBeat blog: global.nytimes.com/arts
ART, PAGE 14
Dutch exhibition tells
the story of 1738 sinking
that killed 664 Africans
Heirs trying to recover
works say institutions
use courts to block claims
INTERNATIONAL HERALD TRIBUNE 14 | TUESDAY, JULY 2, 2013
. . . .
three works from the Museum of Mod-
ernArt, arguingtheywere the subject of
a forced sale after Mr. Grosz fled the
Nazis in 1933.
A federal judge dismissed the
Groszes lawsuit in 2011, citing the stat-
ute of limitations. Before the case
landed in court, the museum hired re-
searchers at Yale University and the
former U.S. attorney general Nicholas
deB. Katzenbach, who diedin2012, to re-
view their evidence. Mr. Katzenbach
concluded that Groszs Jewish dealer,
Alfred Flechtheim, had fair title to the
works and freely sold them. The
Groszes own experts, though, chal-
lenged his report and declared that
Flechtheim was forced to flee Germany
after his Dsseldorf gallery was Ary-
anized in 1933 and given to a Nazi
Party member.
That interpretation was affirmed in
April by a ruling from the German gov-
ernments advisory commission on
plundered art in an unrelated case in-
volving the Museum Ludwig in Co-
logne. While there is an absence of
concrete evidence, the commission
concluded that on balance, it is to be
assumed that Alfred Flechtheim was
forced to sell the disputed painting be-
cause he was persecuted.
Margaret Doyle, a spokeswoman for
MoMA, said the museum had no in-
terest in retaining works to which it
does not have clear title. After years of
extensive research, she said, includ-
ing numerous conversations with
Groszs estate, it was evident that we
did in fact have good title to the works
by Grosz in our collection and therefore
an obligation to the public to defend our
ownership appropriately.
But George Groszs son Martin, 83,
points to a letter his father wrote in 1953
after seeing one of the works, The Poet
Max Herrmann-Neisse, hanging at
MoMA: Modern Museum exhibits a
painting stolen from me (I am power-
less against that) they bought it from
someone, who stole it.
I can remember talking with my fa-
ther about it, he said of the painting.
He was very reluctant to in any way
assail or complain about the treatment
he got from anybody in the United
States, Mr. Grosz said, explaining why
his father never fought to recover the
work.
When refugees complained, Mr.
Grosz said, his father would respond:
You should kiss the ground youre
walking on because they let you in.
NEW YORK
BY ANTHONY TOMMASINI
The Metropolitan Opera House has
been justly acclaimed for its excellent
acoustics. And not just in the choice
seats. Many opera buffs assert that the
best seats in the house are the most af-
fordable ones: up in the balcony and
family circle.
A small number of opera houses and
concert halls around the world have in-
troduced sound enhancement systems,
sometimes openly, sometimes stealth-
ily. But the Met is and always will be an
amplification-free zone, the company
maintains, a place where opera can be
experienced the traditional way with
natural sound.
Yet, when Willy Deckers boldly mod-
ern production of Verdis Traviata re-
turnedto the Met inMarch, whywas the
soprano Diana Damrau, singing Viol-
etta, wearing what looked suspiciously
like the kind of body microphone that
has been used for decades in amplified
Broadway shows?
Attendees at the Met maynot have no-
ticed it. I didnt. But a photograph taken
during the Traviata dress rehearsal
by Sara Krulwich of The New York
Times clearly shows a wire running up
Ms. Damraus back, fromthe top edge of
her dress right into her hair. In this re-
vealing photo Ms. Damraulooks like she
could be appearing on Broadway in Vi-
oletta, the Musical. Ms. Krulwich, who
has been photographing Met produc-
tions for more than 20 years, had never
noticed a singer with a body micro-
phone, including in her close-up camera
images. Nor hadI ever seensucha thing
fromthe excellent seat I usually occupy.
When I first made inquiries at the
Mets media office I encountered some
confusion about the matter. An explana-
tion soon came from Peter Gelb, the
companys general manager, who also
spoke at length in a phone interview.
In certain productions during certain
scenes singers are sometimes posi-
tioned in places on the Mets large stage
where their voices cannot be picked up
by the network of microphones used for
radio and for the HD broadcasts that
have become so popular in recent years.
In these instances a singer will wear a
body microphone, which carries the
singers voice to the control panel for
the broadcast, but not, Mr. Gelb in-
sisted, into the house.
Mr. Deckers production of La Travi-
ata is dominated by a set with a high
curved wall that extends well upstage.
So during some scenes the soprano
singing Violetta is quite far from the ra-
dio microphones, which are typically
placed downstage near the rimof the or-
chestra pit, on the sides of the prosceni-
um and above the stage. Using a body
microphone is the only way, Mr. Gelb
said, tomakeViolettaaudible, withprop-
er balances, to the broadcast audience.
Thats the explanation and, assuming
this is the whole story, it seems reason-
able. Still, this practice takes sound
design for an opera broadcast to a new
dimension.
The sight of anopera singer wearinga
body microphone is enough to cause
consternation among many opera-lov-
ers. Mr. Gelb described the practice as a
pragmatic necessity at a time when the
Met is doing more broadcasts than ever.
He acknowledged that the practice, rare
before the advent of HDbroadcasts, had
become more common, though only five
productions, out of 27, in the past season
involved body microphones during cer-
tain scenes, he said.
For example, in Bartlett Shers 2012
production of Donizettis Elisir
dAmore, which returned this season,
when Dr. Dulcamara first steps fromhis
wagon to sing about the wonders of his
miracle elixir, a large crowd of choris-
ters stand downstage facing him, their
backs to the audience. The hubbub from
the crowd does not cover Dulcamaras
voice inthe house, but it does drownhim
out for broadcast listeners. So during
that scene, Mr. Gelb said, the singer
wears a microphone on broadcast day.
And in Bizets Carmen, in Richard
Eyres production, also seen this sea-
son, during the scene at Lillas Pastias
tavern when the women start dancing,
the stomping and shuffling would
drown out Carmen on a broadcast. So
the mezzo-soprano singing the role
must wear a body microphone during
that scene, andonlythat scene, Mr. Gelb
said. Carmens voice comes through
fine on its own in the house.
Mr. Gelb said the Met generally tried
to avoid using body microphones. For
one thing, singers dont like being im-
peded by hardware, he explained. On
the other hand, singers like being heard
properly. So during the broadcast they
will wear them, sometimes taped to a
leg, if required. Of course, we have to fig-
ureout aclever waytocamouflagethem,
though. There was obviously a slip-up
in the camouflaging when Ms. Damraus
wire was exposed during Traviata.
As someone who cherishes classical
music as an art form that glories in nat-
ural sound(while fullyappreciatingthat
many contemporary composers have
used amplification in sonically alluring
ways) I get nervous hearing Mr. Gelb
talk of camouflaging wires on singers
bodies. And the Met has certainly kept
this practice secret.
Typically the company has been very
open about the infrequent instances
when amplification into the house is
used. Onoccasiona composer has asked
for singers to be amplified, notably John
Adams for the Mets productions of his
Doctor Atomic and Nixon in China.
Mr. Adams has long used subtle ampli-
fication to achieve the sound he strives
for in opera.
Obviously, to learn that a great singer
at the Met is wearing a body micro-
phone of any kind may cause opera
buffs to fear electronic intrusions into a
beloved and sacrosanct art form. But
the Met would argue that this technol-
ogy is allowing broadcast listeners to
approximate the experience of hearing
an opera in the house. And since the
early days of live radio broadcasts,
sound design has been an integral part
of the process.
Since 1980, the process has been over-
seen by Jay David Saks, the sound de-
signer for the Mets broadcasts. Mr.
Saks, whois boththeaudioproducer and
his own engineer, sits at the control pan-
els during broadcasts and has overseen
and mixed 1,253 live radio broadcasts
and 150 audiovisual productions, includ-
ing all of the Mets HDbroadcasts.
The challenge, he said inaninterview,
is to make a live broadcast sound natur-
al. Of course, this involves a consider-
able manipulation of sound. I try to
create the impression one would have,
in an aesthetic and emotional and react-
ive way, if one was sitting in the house in
a really good seat, he said. Yet, he said,
if he were to place a microphone in a
choice seat, say, in the center of the 10th
row, the result would sound dreadful.
Each set has its own acoustic qualit-
ies, he said. The one for La Traviata is
among what Mr. Saks calls those
megaphone sets that focus and direct
the voices out into the house. Yet such
sets can be nightmares, he said, for
broadcasts.
But Mr. Saks strongly rejected the
idea that body microphones represent a
more intrusive kind of amplification. I
would bet everything I own that from
listeningto the broadcasts youcouldnot
tell which singers and which produc-
tions used body microphones, he said.
This story, he added, referring to my
pursuit of the matter, started from
something someone saw, not from
something someone heard.
Avery fair point.
The House at Belle Fontaine. Stories.
By Lily Tuck. 203 pages. Atlantic
Monthly Press. $23.
BY EMILY COOKE
In My Flame, one of the stories in
Lily Tucks newcollection, a woman
finds out, long after her former hus-
bands death, that he repeatedly slept
with his teenage niece. The girl is also
dead, having driven drunk. So betrayal
has a longer life than its perpetrators:
The many intervening years cannot
prevent the protagonist fromfeeling
shocked and duped.
Such a bald statement of feeling is
rare for Ms. Tuck, a writer chary with
reports of her characters inner lives.
Were not often privy to their reflec-
tions; their thoughts tend toward mem-
ories that are not especially emotional,
or local observations or desires. She
hoped the bus would not be late as it
was her day to car pool. It might be
nice, for a change, to have another fe-
male in the house. Dr. Harris-
Mehtas white coat, Helen notices, is
buttoned up the wrong way and, briefly,
she is tempted to reach over and fix it.
Because Ms. Tuck prefers to let event
and dialogue speak for themselves, her
characters can appear opaque even,
in their poverty of introspection, defi-
cient. And the stories in this book (her
second collection) are most often nar-
rated in the third person and the
present tense, further restricting them
to the external and the immediate.
Sometimes, this opacity extends to the
stories more broadly, which march for-
ward with such steady, uninflected at-
tention to narrative details he said,
she said, this happened, that did it
can be tough to have a sense of the im-
port of their ensemble.
Ann Beattie and Raymond Carver
have been two of the best practitioners
of such reticence or minimalism, paring
away authorial comment to let the facts,
juxtaposed just so, blaze mutely. (In fact
Ms. Tuck studied under Carvers famous
editor, Gordon Lish.) And as Ms. Beattie
and Carver demonstrate, meaning and
emotion can be most powerful when
they emanate fromincident plainly
drawn, or when they are allowed to hang
over the story in a kind of radiant fog.
Ms. Tucks stories succeed at this ef-
fect more often than her five novels do.
In her stories as in her novels, Ms.
Tucks women are often divorced, or in
the process of leaving their husbands,
or married yet jealous. They are si-
lently beached on the shores of their
lives, and stunned into feeling only by
brushes with tragedy or grotesquerie.
In Bloomsday in Bangkok, Claire
waits in the car, sickened, as her hus-
band tries to eat the brains of a living
monkey. More usually, vehicular acci-
dents car wrecks , a plane crash, a
train accident serve the thunderbolt
function. Lucky, about a middle-aged
painter and her young tenant, features
two such collisions, including one that
kills the painters former husband after
a long estrangement. Numbly, the paint-
er identifies his body in the morgue,
telling the doctor she is still his wife.
Meanwhile, the tenant and his girlfriend
have witnessed another car accident,
and the conversation it prompts turns
into a breakup. The mutual nearness to
disaster shocks the landlady and her
tenant into an unanticipated moment of
intimacy, if not any confession of feel-
ings. Later the tenant overhears the
painter crying; he doesnt knowwhy.
These stories are more complexly
and satisfyingly structured than those
of her previous collection, Limbo, and
Other Places I Have Lived (2002). A
handful switch point of view, and many
make dramatic jumps in time, often via
the characters memories but some-
times more excitingly because more
brazenly simply because Ms. Tuck
decides they will.
The Riding Teacher opens with the
title characters former pupil learning
of his death froma notice in the paper.
Her memory leads her back to adoles-
cence, to the crush she and a friend
shared on the handsome young riding
teacher, the friends affair with himand
eventual pregnancy, and finally to her
giving up their child for adoption.
In the collections final story, Sure
SARA KRULWICH/THE NEW YORK TIMES
The soprano Diana Damrau, with a wire snaking up her back, starred with Saimir Pirgu in Verdis Traviata at the Metropolitan Opera.
culture music art books
restitution claim, it has settled with the
heirs of two Jewish art dealers and re-
turneda 14th-centuryembroideredpan-
el to a museumin Trento, Italy.
Neither side can agree on how many
people have approached American mu-
seums with restitution claims. The mu-
seum directors association, which em-
phasizes that few cases end up before a
judge, lists two dozen cases where insti-
tutions, including the Detroit Institute
of Arts, returned art to individual heirs
without going to court.
But critics, including the Holocaust
Art RestitutionProject andthe Commis-
sion for Art Recovery, say problems
arise in the less straightforward cases,
where documentation is missing or it is
unclear whether Jewish owners freely
parted with a work of art or were co-
erced by the Nazi authorities into
selling it for a pittance.
Mr. Eizenstat is among those who
have long argued that the courts are in-
herently ill-suited to resolving restitu-
tioncases andthat to avoidlitigationthe
United States should create an inde-
pendent mediation board, as several
European countries have. This spring, a
New York chapter of the Federal Bar
Association put forward a resolution
calling for the creation of an American
commission along those lines.
Douglas Davidson, the State Depart-
ments current special envoy for Holo-
caust issues, said at a conference at The
Hague in November that alternatives
to litigation are preferable, but he con-
ceded that a similar American commis-
sion is unlikely to emerge. One major
obstacle is that whereas in Europe, mu-
seums are typically government-
owned, most American museums are
privately run, making it difficult to man-
date compliance.
Such panels are not necessarily insu-
lated from criticism in any case. The
Dutch Restitutions Committee, for ex-
ample, drewcriticismlast month after it
ruled that the interest of two museums
in retaining paintings outweighed the
heirs interest in restitution.
Raymond Dowd, a partner at the New
York lawfirmDunnington, Bartholow&
Miller, who often handles restitution
claims, complains that museums often
reviewthe evidence and decide on their
ownif a case is valid. Museums oftenfail
to make their original research on a
works provenance or sale available or
to submit the scholarship to peer re-
view, he added.
He cited the case of a family that is
seeking to recover art once owned by
Fritz Grunbaum, a popular Viennese
cabaret performer who died at a con-
centration camp. He said that 10 Ameri-
can museums, including the Allen Me-
morial Art Museum at Oberlin College,
have works by Egon Schiele that were
listed on a 1938 German government in-
ventory created after Mr. Grunbaum
was shipped to Dachau. Some of the mu-
seums failed to provide full information
about the provenance of the works, he
said, and the Allen did not even list Mr.
Grunbaumin the Schieles provenance.
Andria Derstine, the Allens director,
said in an e-mail that the museum had
cooperated with Mr. Dowds requests
for information and that it concluded
after its owninvestigationthat the claim
had no merit. It did revise its online list-
ing last month to reflect that Mr. Grun-
baumonce owned the Schiele.
For years, the family of the artist
George Grosz has fought to recover
and Gentle Words, after a German
philology professor falls off a train and
dies, we learn of the affair he has had
with his student, who happens also to
have been on the train. The story fol-
lows the professors wife and student-
mistress over several decades, through
the wifes later love affair and the mis-
tresss later marriages, and closes with
the professors grown son who as a
child found a letter about the affair
making a movie that dramatizes his fa-
thers death.
For Ms. Tuck, our fantasies about
other peoples experience stand in for
more abstract thought or readier ac-
cess to our own emotions. Instead of in-
terpreting others, people picture them,
which of course is its own kind of inter-
pretation. Sometimes, these imaginings
seemunconvincing because they at-
tribute to characters what is in fact the
novelists own procedure.
Its a relief that Ms. Tuck avoids the
moralizing or false conclusiveness that
might accompany her leaps in time and
melodramatic material. Her somewhat
showily modest sentences, describing
what happens but not what it means,
what is said but not what anybody
thinks, add up in a fewexcellent stories
to an eerily dignified mood, a complex
and antinostalgic sense of what it is like
to be old and looking back, nothing to
do now. The less accomplished stories
resemble most of Ms. Tucks novels in
suggesting that narrative restraint isnt
always emotionally generous. An ex-
pressionless face can hide very much
or nothing at all.
Emily Cooke is an editor at The NewIn-
quiry.
JULIE THAYER
Lily Tuck
Wired for sound at the opera
Caught up in nets of small betrayals
ONLINE: THE LITERARY LIFE
Reviews, profiles of authors and more
at global.nytimes.com/books
ONLINE: PRESS PLAY
Listen to podcasts of noteworthy new
music at global.nytimes.com/music
BOOK REVI EW
Demands of broadcasts
require use of body
microphones, Met says
ESTATE OF GEORGE GROSZ/MOMA
George Groszs Republican Automatons.
menistan one of the most repressive
countries in the world.
Monsters University, an animated
frolic fromDisneys Pixar unit, sold
about $46.2 million North American tick-
ets in its second weekend, bringing it
$170 million in domestic sales to date.
That put it well ahead of The Heat, a
comedy starring MELISSA MCCARTHY and
SANDRA BULLOCK. That movie placed
second with $40 million in weekend sales
for 20th Century Fox. BRADPITTs World
War Z was third with about $29.8 mil-
lion in the films second weekend; it has
had $123.7 million in domestic sales since
opening. ROLANDEMMERICH, meanwhile,
had a misfire in White House Down,
with CHANNING TATUMand JAMIE FOXX it
opened in fourth place, with about $25.7
million in sales for Sony Pictures.
BBC News says JAMES CAMERON has
been sued by a British artist who claims
the director copied his work for the
movie Avatar. ROGERDEAN, who has de-
signed albumcovers for the bands YES
and ASIA, sued in NewYork last week. He
is seeking $50 million fromthe Titanic
director, contending that the similarities
between the movie and his work were
too striking to be ignored. Avatar is
the highest-grossing filmever.
PEOPLE
RICHARDFORD and TIMOTHY EGAN will
receive the ANDREWCARNEGIE Medal for
Excellence this year for fiction and non-
fiction. Mr. Ford was cited for the novel
Canada, narrated by the teenage son
of bank robbers, and Mr. Egan for Short
Nights of the ShadowCatcher, a biogra-
phy of the photographer EDWARDCURTIS,
who compiled an encyclopedic archive of
North American Indians. Mr. Egan, a re-
porter for The NewYork Times, and Mr.
Ford each will receive $5,000. (AP)
The singer-songwriter CARLA BRUNI,
Frances former first lady, is touring
France and the United States to promote
her newalbum, Little French Songs.
Its the fourth albumby the Italian-born
former model who began her musical ca-
reer in 1997 and lived in the lyse
Palace with her husband, President NIC-
OLAS SARKOZY. Her first, Quelquun ma
dit (Someone Told Me), was released in
2002 and sold 2 million copies. (REUTERS)
JENNIFER LOPEZ has apologized for
singing Happy Birthday to President
GURBANGULY BERDIMUHAMEDOV of Turk-
menistan during a shownear the city of
Turkmenbashi on Saturday night,
Digital Spy reports. The president has
been accused of rights violations by Hu-
man Rights Watch, which calls Turk- PHOTOGRAPHS: REUTERS, AP, GETTY IMAGES-AFP, AP
CARLABRUNI, JENNIFERLOPEZ, MELISSAMCCARTHY, SANDRABULLOCK
ART, FROM PAGE 13
Museums faulted in effort
to return Nazi-looted art
Singers dont like being
impeded by hardware.
TUESDAY, JULY 2, 2013 | 15 THE GLOBAL EDITION OF THE NEW YORK TIMES
. . . .
Subscribe at
www.amazon.com/ihtkindle
ReadtheIHT
onyour Kindle.
Sports
CYCLING CALVI, CORSICA
THEASSOCIATEDPRESS
The Australian sprinter Simon Gerrans
held off a late charge by Peter Sagan on
Monday to win the hilly third stage of
the Tour de France by less than half a
wheel.
Jan Bakelants of Belgium did enough
in the sweltering heat to keep the yellow
jersey.
Gerrans looked to have the finish line
to himself with about 100 meters, or
about 330 feet, to go, but Sagan made a
late sprint and almost caught him. It
was the second career Tour stage victo-
ry for Gerrans. Jos Joaqun Rojas of
Spain finished third.
Sagan is a guy who can often climb
with the best climbers and sprint with
thebest sprinters, soImreallythrilledto
be able to beat such a classy rider, Ger-
rans said. I surprisedquite a fewpeople
a little bit today, including myself.
Gerrans should not be too surprised,
though, as he had prepared well.
This is a stage that Ive been target-
ing for quite some time, he said. We
were down here in Corsica last weekend
doing a recon and scouting the finishes
and it all paid off today.
Although Gerrans has clinched a
stage victory on all three Grand Tours,
his previous stage triumph on the Tour
was five years ago, on a stage that fin-
ishedinthe northernItalianski resort of
Prato Nevoso.
He was slowing up but just managed
one last effort to throw his bike forward
the way a 100-meter runner would dip
for the line.
I wasnt sure if I had won a half-
wheel length! Gerrans said. All went
perfectly well, my team took great care
of me after the last climb.
He will especially need to thank his
countryman and teammate Simon
Clarke, who was in the early breakaway.
It was the team plan. I was brought
to the Tour de France to join break-
aways, so I made sure I did my job,
Clarke said. I was quite relaxed today
and when youre relaxed it means you
have good legs.
It was a particularly welcome victory
for Gerranss Orica Greenedge team
after the confusion of the first stage on
Saturday, when the team grabbed the
attention of the worlds media when its
bus was stuck on the finish line and was
removed only moments before the
riders arrived.
We saw the footage, Gerrans said,
adding that he could only laugh at the
situation, and that the buss driver did
a fantastic job.
He was embarrassed so we felt quite
sad for him, he added.
Saganis inthe sprinters greenjersey,
which he is expected to contest with the
British sprinter Mark Cavendish, who is
49 points behind.
Ima bit sad about the stage, but the
teams objective is to get the green jer-
sey and thats what we have, Sagan, a
Slovak, said through a translator. I
dont feel at my best yet. But the Tour is
long and there are still a lot of good
stages to come.
Bakelants, the winner of the second
stage on Sunday, finished in 19th place.
The team worked very hard for me,
and Im very happy to keep the yellow
jersey, Bakelants said. It was a very
hot day and the conditions were not
easy.
The 145.5-kilometer, or 90-mile, leg
started from Ajaccio, where the French
emperor and military mastermind Na-
poleon Bonaparte was born in 1769, and
finished in Calvi after three moderate
climbs and a steeper final climb tested
the legs of the peloton.
Gerrans clocked about 3 hours, 40
minutes.
It was the last of the trio of Corsican
stages. On Tuesday, the riders were set
to be back on the mainland for a team
time trial in Nice.
With the Tour heading through Cor-
sica for the first time, some fans got
their first glimpse of the showcase race
and made a point of getting noticed
themselves. One defiedthe heat to dress
up in a full Napoleon outfit, saluting
fromthe roadside.
Further on, a man held up a Corsican
flag as he rode on horseback alongside
the rolling pack.
The scenery was great, but for us it
was super stressful, the French veter-
an Sylvain Chavanel said.
Clarke was the last of the breakaway
group to be caught on the final climb up
the Col de Marsolino.
match, playing her at Wimbledon, espe-
cially on Centre Court. Its definitely not
a shock. I just need to do better.
Lisicki said it is not only that the
Wimbledon grass that suits her big
serveandthelowbouncesuits her strike
zone on her high-risk groundstrokes.
I think there are a fewthings, but also
that I feel very comfortable here, she
said. Having the house, having the
wholeteambeinginthehouse, beingable
to cook, having a great atmosphere.
Wimbledon, with the players staying
in private accommodation in the village,
is indeed a Grand Slam apart, and yet
this was a Wimbledon apart for Willi-
ams, too. This was her first Wimbledon
without her older sister, doubles part-
ner and touchstone, Venus Williams,
who has won five singles titles of her
own at the All England Club yet with-
drew from the tournament with a back
injury (Serena Williams stayed as
usual in the smaller bedroom of their
rented Wimbledon home anyway).
Williamss father and longtime
primary coach Richard Williams was
also absent as was her mother, Oracene
Price.
Serena Williams dismissed the break
in routine as a possible explanation for
her performance. Im 31, she said,
saying sarcastically that she would
really have to go back to the drawing
boards if she could not compete with-
out her family present.
In truth, this match bore a certain re-
semblance to her quarterfinal match at
this years FrenchOpen, whenshe faced
Svetlana Kuznetsova, another player
with enough natural power and confi-
dence not to feel cowed by Williams.
Against Kuznetsova, Williams often
looked tense and overwrought, making
the sorts of errors of commission that
have intermittently plagued her at ma-
jor events. But against Kuznetsova, Wil-
liams was able to punch through the
tension and close out the victory in her
only three-set match of the tournament.
For me, they were the same kind of
days, Mouratoglou said of the matches
against Kuznetsova and Lisicki.
She went through, and after that she
played great until the end of the tourna-
ment in Paris. So probably if she would
havefoundawaytowintoday, shewould
have probably won the tournament, and
we wouldnt be asking these questions.
Williams had won Wimbledon three
of the last four years, gathering
strength in the second week last year
and then carrying that momentum into
the 2012 Olympic tournament, which
were also played here. She came away
with gold medals in both singles and
womens doubles, winning the latter
title with Venus.
Until Monday, she had won 16 straight
singles matches at the All EnglandClub,
and with that 3-1, 40-15 lead against Lis-
icki in the third set, it appeared that Wil-
liams was set to make it 17 in a row.
Instead, there would be three consec-
utive breaks of serve. Williams had a
chance to regain control when Lisicki
fell behind 0-40 on her serve at 3-4. But
she saved the next three break points to
get to 4-4, then broke Williams for the
third time in the set.
All that remained was to serve for the
upset. Lisicki erased the final break
point of the match with her 10th ace and
then staying aggressive closed out
her victory with a short forehand win-
ner that left her flat on her stomach on
the grass where Williams was bounding
with joy after the final last year.
There will be no repeat for the No. 1-
ranked Williams, but then, at this stage,
that should not seemlike a surprise.
Some British hopes dim
Laura Robson failed in her quest to be-
come the first British woman to reach
the Wimbledon quarterfinals since 1984,
falling, 7-6 (8-6), 7-5, in an error-filled
match to Kaia Kanepi of Estonia, The
Associated Press reported fromLondon
on Monday.
Robson, the first British woman to
reach the second week at Wimbledon
since 1998, was ahead, 5-2, inthe first-set
tiebreaker Monday but lost six of the
next seven points. Serving at 5-4, she hit
her first try long, then bounced the
second serve into the net.
Robson, ranked 38th, finished with 24
unforced errors and only 27 winners, as
she had trouble harnessing her fore-
hand.
Kanepi, ranked 46th, moves into her
fifth Grand Slamquarterfinal.
Jo Durie is the last British woman to
have made the Wimbledon quarters, 29
years ago. Kanepi will face Lisicki in the
quarterfinals.
In mens action, Andy Murray, the
second seed, reached the quarterfinals
for the sixth consecutive year, beating
20th-seeded Mikhail Youzhny of Russia,
6-4, 7-6 (7-5), 6-1.
Murray is trying to become the first
British man since Fred Perry in 1936 to
win the title at the grass-court Grand
Slamtournament.
He was the runner-up to Roger Feder-
er at Wimbledon last year, then de-
feated Federer a month later to win a
London Olympics gold medal at the All
England Club.
OLYMPICS TULSA, OKLAHOMA
BY MARY PILON
When Neil Mavis roams the wide, quiet
streets here, he sees an 80,000-seat
Olympic stadiumbloomingwhere afleet
of trucks sit in a parking lot. He ima-
gines kayaks and canoes gliding along
the Arkansas River and marathoners
striding down Route 66, past an oil re-
finery that looms over the highway.
We dont have an answer yet for wa-
ter polo, he said. But one thing we do
have is plenty of land out here in Okla-
homa.
Mavis is the dreamer inchief for Tulsa
2024, this unassuming citys bid to host
the Olympic Summer Games.
For all his enthusiasm, the odds for
Tulsa, one of several cities vying to
bring the Summer Games to the United
States for the first time since 1996, seem
longer than a gold-medal javelin throw.
The Games require an estimated
work force of as many as 200,000, which
would mean enlisting one of every two
men, women and children within the
city limits.
International Olympic officials re-
quire a host city to have a minimum of
45,000 hotel rooms. Tulsa has about
15,000. And the estimated price tag,
which will almost certainly top $5 bil-
lion, is equivalent to more than half the
state budget.
But Tulsa, its boosters argue, offers
something that big-ticket American
rivals like Los Angeles, Boston and Dal-
las can only dream of: the vast frontier
of America.
This part of the United States pro-
ducedthe singer WoodyGuthrie andthe
athlete Jim Thorpe. Neon signs still
glowalong Route 66. J. Paul Getty made
his first million in oil nearly a century
ago in Tulsa, and the citys Art Deco
buildings have survived booms, busts
and tornadoes. The larger cities arent
truly representative of what the real
America is, said Jennifer Jones of the
Tulsa 2024 bid committee. The real
America is the midsize cities, and we
want people to see America.
In February, the U.S. Olympic Com-
mittee sent letters to 35 cities, including
Tulsa, to gauge interest in hosting the
Games. At least eight have signed on,
and others are on the fence.
It would be a major victory for the
U.S.O.C. to secure even a finalist for the
2024 Games. U.S. cities have been shut
out since Salt Lake City, Utah, hosted
the 2002 Winter Games.
Tulsa would be among the smallest
cities to play host to the Summer Games
in the modern era, and even some of
Tulsas strongest advocates acknowl-
edge that it might not be the most
Olympian of cities at first glance. Mayor
Dewey F. Bartlett Jr. originally had a
hard time picturing Tulsa joining the
ranks of Athens, Barcelona, London,
Tokyo and other hosts of the Summer
Games.
I thought, What are you, nuts? he
said in an interviewin City Hall.
He and other Tulsa boosters know all
too well that they have to overcome
Oklahomas outdated reputation as a
Dust Bowl state choked with tumble-
weed. After all, Tulsa was built on oil,
wheat and cattle, not international
sporting events.
The problemisnt what people think
of us, said LToya Knighten, of Tulsas
chamber of commerce. Its that they
dont think of us.
A few years ago, the chamber
conducted a survey to gauge what out-
siders thought of Tulsa. We were
beige, Knighten said.
But stop someone on the sidewalk in
Tulsa, and you are likely to hear an ode
to the citys charmand history.
Downtown Tulsa now has bistros in
the carcasses of forgotten warehouses,
and it has the BOK Center, a gleaming
arena that opened in 2008, further fuel-
ing the citys national and international
ambitions.
In a nod to the states American Indi-
an history, the Olympic torch would be
led along the solemn Trail of Tears, the
route taken when tribes were forcibly
relocated in the 1830s.
If the mayor was skeptical at first, he
has since come to support the bid, in
large part because of the conviction of
Mavis, an electrical engineer and an in-
structor at a local technology college
who has been working on Tulsa 2024 for
the last five years.
Mavis bought copies of Atlantas 1996
bid to use as a model for Tulsas bid. He
has given a series of PowerPoint pre-
sentations to City Council members and
local business owners, drumming up
support slide by slide. He argues that
revenue fromticket sales and television
rights would offset the costs.
We have all the resources, Mavis
said. We just need the spark.
The Summer Olympics in Oklahoma? Why not, asks Tulsa
PHOTOGRAPHS BY CHRISTOPHER SMITH FOR THE NEW YORK TIMES
If Tulsa wins the 2024 Summer Games, Olympic sports would be held on the Arkansas River, left, and the media center would lie at the feet of the 25-yard-tall Golden Driller statue.
City is dreaming big
and making a pitch for
2024 Summer Games
KANSAS
TEXAS
MO.
A
R
K
A
N
S
A
S
OKLAHOMA
Arkansas R.
Dallas
Fort Worth
Oklahoma City
Tulsa
Tahlequah
Shawnee 69
75
40
44
30
35
80 km
Area of
detail
UNITED STATES
BEN STANSALL/AGENCE FRANCE-PRESSE
Sabine Lisicki offered her respects to the crowd at Wimbledon after defeating Serena Williams, 6-2, 1-6, 6-4, on Monday. The German player moved into the quarterfinals.
Roger, Rafael and nowSerena tumbles
SERENA, FROM PAGE 1
second to the 116th-ranked Sergiy Stak-
hovsky and was not part of the fourth-
round extravaganza on Monday for the
first time in 11 years.
Victoria Azarenka and Maria Shara-
pova the two women logically pre-
sumed to have the best chance of stop-
ping the streaking Williams failed to
make it past the second round, too.
But Williams, the 31-year-old Ameri-
can who has won 16 Grand Slam singles
titles and was the top seed here, was
quite rightly the overwhelming favorite
after sweeping to five titles in a row, in-
cluding the French Open, before arriv-
ing on the grass that suits her intimidat-
ing serve and quick-strike tennis as well
as a Pimms suits the end of a Wimble-
don days play.
And yet, and yet
It had to stop sometime; shes not a
machine, said her coach, Patrick
Mouratoglou. The lawof streaks is that
they end sometime. We knew it was go-
ing to end. We just didnt know when. It
was today, and its not the end of the
world, just aloss, andit reminds us this is
a game, and that nobody is unbeatable.
This Wimbledon could now be ac-
cused of belaboring the point, particu-
larly in the womens draw where only
one of the top four seeds (and three of
the top eight) reached the quarterfinals.
For now, the focus of local attention
Andy Murray remains in contention
and advanced with some aches and
pains to the mens quarterfinals on
Monday by defeating Mikhail Youzhny.
But this Grand Slam tournament is
well on its way to being the strangest
since the 1997 French Open, when the
little-known, 66th-ranked Gustavo
Kuerten ambushed star after star to win
the mens title and the ninth-seeded Iva
Majoli won the womens title, which
would be her one and only major cham-
pionship.
What it does show is the depth in
both mens and womens tennis, the
former womens No. 1 TracyAustinsaid.
And what it does show is, Wow, O.K.,
they are beatable, so maybe I can do it,
as well. I liked what Stakhovsky said.
He had to go out there and beat Roger
and beat Rogers legend, as well.
With Serena, I think thats the same
thing. When you go out against Serena
and she has her back against the wall,
everybody knows shes one of the best
competitors in that situation, so a lot of
credit to Sabine Lisicki to handle the
situation when Serena has won here
five times.
Lisicki, the powerfully built 23-year-
old German nicknamed Boom Boom
for her serve, has yet toget past thesemi-
finals here. But the No. 23 seedis nowthe
London bookmakers favorite and, un-
like Darcis and Stakhovsky and Michelle
Larcher de Brito, who upset Sharapova,
Lisicki is a very well-established threat.
She beat Sharapova last year on
Centre Court on her way to the
quarterfinals and now has a glittering
17-4 record at Wimbledon compared
with a 16-15 record at the other three
Grand Slamtournaments.
It is not a shock, Williams said of
her defeat. She plays really good on
grass. She has amassive, massive serve.
So going in there, you have to knowthat
its definitely not going to be an easy
Gerrans gets
Tour victory
by barely a
tire spoke
GUILLAUME HORCAJUELO/EPA
The Tour offered seaside vistas as it
moved from Ajaccio to Calvi in Corsica.
Its not the end of the world,
just a loss, and it reminds us
this is a game, and that
nobody is unbeatable.
INTERNATIONAL HERALD TRIBUNE 16 | TUESDAY, JULY 2, 2013
. . . .
NON SEQUITUR PEANUTS DOONESBURY FLASHBACK
GARFIELD CALVIN AND HOBBES
WIZARD of ID DILBERT
Across
1 Planets, to poets
5 ___-European
9 Sidewalk writing aid
14 Sorvino of Mighty
Aphrodite
15 Prezs #2
16 W.W. IIs ___ the
Riveter
17 Dont be ___
(Googles motto)
18 Adversary on the
Arabian Peninsula?
20 Home of Cristoforo
Colombo Airport
22 Parched
23 Tummy muscles
24 Something
comparable in
southern Africa?
28 Has in mind
29 Source of a 1973
crisis
33 Common part of
Dutch surnames
35 Torahs are kept in
them
36 Get married
38 & 40 Royal emblems
in North Africa?
41 Hairspray alternative
42 Cake layer
43 Hairspray alternative
44 Insect stage after
larva
45 Cajoling words before
asking for something
47 TV show in the
Mideast?
52 Place with
complimentary
towels
55 Ibuprofen target
56 Brazilian dance
57 Part of an air force in
south-central Asia?
61 One drawing blood
62 WWE locale
63 They may get in
the way of an
agreement
64 James who wrote A
Death in the Family
65 Full of bluster
66 Some conifers
67 The U.S. Virgin Is.,
e.g.
Down
1 Alphas opposite
2 Torn apart
3 Mentioning in
conversation
4 Locale for many a
western brawl
5 Poison ___
6 Maiden name
preceder
7 Lead-ins to
negotiations
8 Puccini productions
9 Philosophy
10 Sweetie
11 Like whale hunters,
e.g.
12 Birdhouse locale
13 Lockers
19 Zilch
21 Places where people
36-Across
25 High home
26 Paul who sang
Lonely Boy
27 The Naked Maja or
The Clothed Maja
30 The fifth of the Five
Pillars of Islam
31 Falco of Nurse
Jackie
32 Either of Frosty the
Snowmans eyes
33 Siren
34 Baseballs Moises
36 Theyre the pits
37 Jibes
39 Morales of La
Bamba
40 29-Across country
currency
42 Like the wasteland
in a classic Who song
45 Circus man
46 Oslo Accords figure
48 Spread out
49 Genre of N.W.A. and
Run-D.M.C.
50 Al Capp guy
51 Pale or dark
beverage
52 Sudden impediment
53 Homeland of
Literature Nobelist
Mario Vargas Llosa
54 Copies
58 Marcher in a column
59 A.S.A.P.!
60 Suffix with baron
CROSSWORD | Edited by Will Shortz
Solution to July 01 puzzle PUZZLE BY DANIEL RAYMON THE NEW YORK TIMES
1 2 3 4 5 6 7 8 9 10 11 12 13
14 15 16
17 18 19
20 21 22 23
24 25 26 27
28 29 30 31 32
33 34 35 36 37
38 39 40
41 42 43
44 45 46
47 48 49 50 51
52 53 54 55 56
57 58 59 60 61
62 63 64
65 66 67
T R A D E R S H A C K L E
R E L A T E D T A R H E E L
O N E L A N E D I G I N T O
M E R L T M S R O C
P E T I T O H M S A L O T
E S S E S S O A P G A L A
R A F W A R O V E N
A B S R O A D M A P A O K
C R O C O H O Y O O
T A D A T O W S K N A V E
S T A B L Y N N E A V E D
A G O S O C D I N G
S T E R E O S B A D I D E A
R E V E R S E S T E E L E R
A L A T E E N S A T Y R S
C
r
e
a
te
d
b
y
P
e
te
r
R
itm
e
e
s
te
r
/
P
r
e
s
e
n
te
d
b
y
W
ill
S
h
o
r
tz
SUDOKU No. 0207
Fill the grid so that
every row, column
3x3 box and
shaded 3x3 box
contains each
of the numbers
1 to 9 exactly once.
(
c
)
P
Z
Z
L
.c
o
m
D
is
tr
ib
u
te
d
b
y
T
h
e
N
e
w
Y
o
r
k
T
im
e
s
s
y
n
d
ic
a
te
Solution No. 0107
8
9
5
3
6
4
2
1
7
1
3
7
5
9
2
6
4
8
4
2
6
8
7
1
5
9
3
6
4
9
1
5
7
3
8
2
2
1
8
4
3
6
9
7
5
5
7
3
2
8
9
4
6
1
7
8
4
6
2
5
1
3
9
3
5
1
9
4
8
7
2
6
9
6
2
7
1
3
8
5
4
1
7
5
8
9
6
7
5
3
9
6
8
2
7
5
1
9
3
4
8
2
BRIDGE | Frank Stewart
If I amasked about the most common er-
rors defenders make, I can cite forget-
ting to count and missing easy infer-
ences. At the top of the list, I put failing to
distinguish between active and pas-
sive defense.
In todays deal, West led a low diamond
against four spades, and East took the
king . . . and cashed the ace. That was (al-
most) the end of the defense. South won
the next diamond, drew trumps, lost a
club finesse and claimed. Making four.
Four Tricks
To beat four spades, East needs four
tricks. He can see two diamonds, no
trumps and one club, so the defense
needs a heart quickly, before
dummys clubs give declarer discards.
East must shift to a heart at Trick Two
preferably to the queen in case West is
reluctant to put up his king. The defense
can cash a heart when East takes the
king of clubs.
The problem would be harder at match-
point duplicate scoring. If South had K
J 10 9 2, K8 6, J 8 6, 8 6, the right de-
fense at IMPs or party bridge would be costly at duplicate.
Daily Question: You hold: 8 7; Q 7 3; A K 10 9 4; K 7 3.
You open one diamond, your partner responds one spade, you bid 1NT and he tries
two hearts. What do you say?
Answer: In Standard methods, partners second bid is not forcing or encouraging.
Your 1NTlimited your strength, and he is suggesting a contract. To pass may be best:
Partner may have five cards in each major. Since he may also have QJ 10 6 5, A6 5
4, 5 3, 4 2, I would bid two spades. I would never bid 2NT.
Tribune Media Services
North Dealer
Both sides vulnerable
North
A Q 4 3
A J
5 2
A Q 10 5 2
West
6 5
K 10 5 4 2
J 7 3
9 8 4
East
8 7
Q 7 3
A K 10 9 4
K 7 3
South
K J 10 9 2
9 8 6
Q 8 6
J 6
North East South West
1 1 1 Pass
3 Pass 4 All Pass
Opening lead - 3
SOCCER RIO DE JANEIRO
BY JAMES MONTAGUE
Neymar da Silva Santos Jnior was
having an unusually quiet first half
when the ball was poked through to him
on the left side of Spains penalty area.
It was a few minutes before halftime
of the FIFAConfederations Cupfinal be-
tween the host, Brazil, and the world
and European champion, Spain, at the
refurbished Maracan stadium.
Before the tournament, there had still
been a question about the ability of Ney-
mar, a 21-year-old Brazilian striker.
Was he overrated? Was he more
about style, with his crazy haircuts,
over substance? Did he have what it
took to have his name whispered in the
same breath as Romrio, Ronaldo and
the greatest of all, Pel?
Neymar took one touch before blast-
ing the ball, left-footed, high into the
goal over goalkeeper Iker Casillas. It
was his fourth goal in five games. Ney-
mar, who led Brazil to a 3-0 victory, was
the undoubted star of his teams Confed-
erations Cup campaign, his face painted
on a thousand murals in a thousand
favelas across the country.
No one will talk of him as overrated
anymore. Certainly not the 73,000 fans
dressed in the ubiquitous yellowjerseys
of Brazil, the fans who greeted his goal
with a deafening roar. Neymar had
come of age.
His fellow striker Fred added two
goals inthe victorySunday. But this was
Neymars night, when seemingly un-
beatable Spain was not so much beaten
as humiliated.
I cant feel any better than howI feel
now, said Luiz Felipe Scolari, the 64-
year-old coach who won the World Cup
with Brazil in 2002 and will try to do the
same in the country next summer. We
can now dream that we have a path
ahead toward the World Cup.
The Confederations Cup was a lot of
things it should not have been, and a lot
of things it could only have dreamed of
being.
The tournament is a dress rehearsal
for the WorldCupfinals, a chance for the
infrastructure and stadiums to be put to
the test. Brazil has enjoyed a remark-
able economic boom in recent years,
and the World Cup, along with the 2016
Olympic Games in Rio, was supposed to
be its moment in the sun.
Instead, the tournament became a
political lightning rod, with mass
protests taking place outside the stadi-
ums hostingthe games. Manyturnedvi-
olent as Brazilians railed against cor-
ruption, the high cost of living, high
taxes and poor public services.
Brazils new and refurbished soccer
stadiums, some running double their
budgets, came to symbolize the ex-
cesses of the governing classes. The
protests have forced the Brazilian pres-
ident, Dilma Rousseff, herself a politi-
cianborninthe fires of street protest, in-
to a number of important concessions.
After 300,000 protesters took to the
streets last week in Rio, where the mili-
tary police fired tear gas, flashgrenades
and rubber bullets, security for the final
resembled something from a war zone.
Banks of armed officers guarded the
stadiums. Some had dogs. Dozens more
were on horseback.
The trouble on the streets had anoth-
er effect. Brazils teamprogressed with-
out the crushing weight of expectationit
usually carries.
Within two minutes at the Maracan,
Brazil was ahead. In a goal-mouth
scramble, Fred hooked the ball into the
net while on the ground.
Minutes before the end of the first
half, Neymar made it 2-0 with his spec-
tacular strike. Fred scored his second
goal early in the second half.
When Spain defender Gerard Piqu
was shown a straight red card, there
was no route back for the world champi-
ons, who looked tired and devoid of any
kind of cutting edge or artistry, outside
of the metronomic passing of midfielder
Andrs Iniesta. Sergio Ramos com-
pounded Spains misery with a missed
penalty kick in the 55th minute.
After the final whistle, no one had left
the stadium as the Brazil team did a lap
of honor. Neymar won the man of the
match award, as well as the Golden Ball
as the top player of the tournament.
Neymar steers Brazil
to a rout on home turf
Rob
Hughes
GLOBAL SOCCER
LONDON Where does what happened
at the Maracan leave the world order
of soccer? Brazils physicality, its youth
and its fervor wiped out Spain almost
as brutally as Bayern Munich did when
it destroyed Barcelona in the Champi-
ons League earlier this year.
The two are inextricable. Spain has
been Barcelona in a different colored
shirt these past four momentous years,
with the same core players passing and
moving in their beloved tiki-taka style.
Bayern showed in the spring that if a
team is quick to the ball and quicker in-
to the tackles, it can cut off the posses-
sion that is the styles oxygen. Brazil
showed the same thing on Sunday in its
3-0 victory, and Italy came darn near to
showing that last week in its semifinal
with the Spanish.
It isnt necessarily anti-soccer, al-
though the 26 fouls that Brazil commit-
ted in shutting down Spain were cer-
tainly Luiz Felipe Scolaris stamp of
making the Beautiful Game into some-
thing more practical. Big Phil ac-
knowledged during this Confederations
Cup that he has deficiencies in this
crop of Brazilians, but he also has a
year to convert them into winners.
The conversion looks to be ahead of
schedule. See how Fred and Hulk, nom-
inally strikers, work for the team. Wit-
ness Neymar augmenting his genius
with attempted tackles that go near the
bone. Watch Oscar, with the choir-boy
looks, scuffle to get underneath the feet
of Xavi Hernndez or Andrs Iniesta.
Those are, or were, the architects of
tiki-taka. Losing one game, albeit by a
3-0 score, which hasnt happened to
Spain since 1985, is not exactly the end
of their world. Losing to a Brazil team
that was fired up by unrest in the
streets and by astonishing partisan-
ship in the stadium does not diminish
all that Xavi and Iniesta have achieved.
Their game is based on love of the
ball, and it is hard to exhibit love when
JORGE SILVA/REUTERS
Neymar, right, with his teammate, Fred.
OLIVER WEIKEN/EUROPEAN PRESSPHOTO AGENCY
The Brazilian player Oscar, bottom, holding off Andrs Iniesta as Spain was crushed, 3-0.
almost nobody in the audience loves
you. Brazils togetherness home
team and home crowd took the
breath away when 70,000 voices, in-
cluding those of the players, sang the
national anthem at full volume while
the music was turned down.
It rarely gets more intimidating than
this, not even when New Zealands All
Blacks go through their haka routine
right in the faces of their rugby oppo-
nents.
Two things have to happen to make a
contest in such an atmosphere: The
home side must be inspired by it, and
the visiting team must not be cowed.
Maybe Spain got off on the wrong
foot from the moment that Fred,
though sprawled on the turf, hooked in
the opening goal after barely 90
seconds.
Maybe Spain was pre-empted by the
thousand extra miles that it had to
travel and by the one fewer day it
had to recover after its extra-time
and penalty shootout marathon against
Italy up in Fortaleza last Thursday.
(Brazil played its semifinal on Wednes-
day closer to Rio de Janeiro, in Belo
Horizonte.)
Or maybe history favored Brazil any-
way. Brazil won its third straight Con-
federations Cup, and has not lost at
home since 1975.
For all that is said and written about
the Brazilians being scattered around
the world, mostly in European soccer,
their home is a castle that is difficult to
storm.
Scolari organized his countrymen to
win the 2002 World Cup in South Korea
and Japan, went away to manage
around the world, and is only eight
months into his comeback as the na-
tional coach. He is building blocks now
for next June and July, building belief,
and at 64 it is evident from his antics on
the sidelines that he demands no less
today than he did a dozen years ago.
One thing that is important, he
said after Sundays triumph, is that
we are strong contenders. We have
beaten four former world champions
France, Uruguay, Italy and Spain in
the last 30 days. Indeed so. It is
clearly a wilted Spain, just as it was a
broken Barcelona that fell to Munich. It
is no coincidence that Scolari picked
Luis Gustavo, a defensive midfielder in
Bayern Munichs side in April, to share
the industry with Paulinho in his own
lineup.
It is no coincidence either that Xavi,
the grand master of 126 international
caps, didnt have the energy, the desire,
or the time to orchestrate either Bar-
celona or Spain in those two heavy de-
feats.
Xavi is 33, but he has packed in so
many games and trophies, with non-
stop running, sometimes while mask-
ing injuries, that it would be a surprise
if fatigue were not getting to him.
He has the class, and he says the de-
sire, to go on. But, notably without Real
Madrids midfield enforcer, the 31-year-
old Xabi Alonso at his side during this
tournament, Xavi simply could not get
on the ball in the final on Sunday.
Nor could he against Bayern over
two games this spring. Barcelona (and
then Spain) has to make a tough de-
cision. Xavi has been key to everything
that we have marveled at, but he turns
34 next January.
Barcelona is considering an offer
from Manchester United to buy Thiago
Alcntara, who has effectively been
Xavis understudy for four years. Al-
cntara, 22, is the son of a Brazilian
World Cup winner, Mazinho. He has
just stroked Spain to the European Un-
der-21 tournament title in Israel, not
just simply dominating the final, but
also scoring a hat trick.
He chose Barcelona as his schooling
ground, came up through the academy,
adored the way Xavi plays tiki-taka,
and added his own Brazilian flair to
that.
Decision day is close: Manchester
United would give Thiago the reins to
dictate its rhythm the way that Paul
Scholes did for a decade. But does Bar-
celona and Spain need his youth
more?
Spain and Barcelona face tough decision
sports soccer
TUESDAY, JULY 2, 2013 | 17 THE GLOBAL EDITION OF THE NEW YORK TIMES
. . . .
Business
WITH
PETROS GIANNAKOURIS/THE ASSOCIATED PRESS
A nearly deserted shopping arcade on Monday in Athens. Greek officials have asked the nations creditors to agree to a lower value-added tax for restaurants as a way to promote tourism.
Troika returns to evaluate Greece
ATHENS
BY NIKI KITSANTONIS
Officials representing Greeces interna-
tional creditors were back in Athens on
Monday, three weeks after mass layoffs
at thestatebroadcaster ERTprompteda
political crisis that led one political party
to quit the shaky coalition government.
Representatives of the troika of cred-
itors the European Commission, the
European Central Bank and the Inter-
national Monetary Fund will deter-
mine whether the Greek authorities
have made sufficient progress with
their economic overhauls to justify the
release of the next installment of aid for
the country.
But before talks between the troika
and Greek officials began Monday, news
reports suggestedthelenders plannedto
release only part of the next installment
of aid rather than the full 8.1 billion, or
$10.6 billion, in order to keep pressure on
Athens to deliver on its pledges.
The I.M.F., which last month con-
ceded that the troika made major mis-
steps in Greeces first bailout in 2010,
might have to suspendloanpayments to
Greece if the authorities are unable to
cover a funding shortfall, as the organi-
zations rules dictate that governments
must have at least 12 months of financ-
ing secured to receive bailout money.
Although the I.M.F.s admission of er-
ror had fueled hopes that the creditors
would adopt a more lenient approach,
the Greek media was dominated Mon-
day by speculation that the government
might be asked to impose further aus-
terity measures despite a deepening re-
cession and unemployment that has
climbed to 27 percent.
The reports cited a leaked document,
purportedly sent by the troika to Greek
officials, suggesting that the govern-
ment might have to make fresh spend-
ing cuts if it fails to collect adequate tax
revenue and close a funding shortfall of
around 1 billion. The gap is attributed
chiefly to the debts of the main health
care provider, Eopyy. Neither the gov-
ernment nor troika officials would com-
ment on the news reports.
Prime Minister Antonis Samaras,
who saw his governments majority in
the 300-seat Parliament shrink to just
three members following the withdraw-
al of the junior partner in the coalition,
the Democratic Left, has insisted that
no more austerity will be imposed. In a
speech to a congress of his conservative
New Democracy party on Sunday, he
emphasized the need for unity to ensure
that the unbelievable sacrifices of the
Greek people had not been in vain. Per-
haps in response to Mr. Samarass ap-
peal, two lawmakers who had left the
party returned to its ranks on Monday,
bringing the governments majority in
Parliament to 155.
But delays in implementing an over-
haul of the public sector, aggravated by
the political crisis last month, have put
Greece in a difficult bargaining position.
Athens is set to miss a July 31 deadline
to move 12,500 civil servants into a so-
called mobility program for a year, dur-
ingwhichtime theywill receive reduced
wages before their status is reviewed.
After a year, each worker will either be
moved to another civil service job, if
there is one available and they are qual-
ified, or they will be laid off.
The newadministrative reformminis-
ter, Kyriakos Mitsotakis, a conservative
regarded as the most proreformist
member of the cabinet that was installed
last week, plans to ask the troika for a
two-month extension of the deadline.
As for promised layoffs in the civil
service, Greek officials are likely to
point to the closure of the state broad-
caster ERT last month as an indication
of their commitment. But since the shut-
down, which left about 2,700 people job-
less, Mr. Samaras has offered to rehire
2,000 of the workers for a transitional
broadcast service.
Greek officials have also asked that
the troika agree to a reduction in the 23
percent value-added tax for restaurant
meals, as a way to help promote tour-
ism. A record 17 million tourists are ex-
pected to visit Greece this year.
Troika envoys are also planning to of-
fer some relief to Greece, according to
news reports citing the leaked docu-
ment, with the lenders backing the im-
plementation of tax breaks intended to
attract sorely needed investment, and
some latitude to hire civil servants in
crucial areas, like tax collection.
The countrys lagging efforts to
privatize state assets are also on the
agenda. The sale of the state gambling
company OPAP has run into problems,
with the Czech-Greek consortium that
was the sole bidder for a 33 percent
stake in the operation demanding reas-
surance that OPAPs contracts were le-
gally sound. Last month, the Russian
natural gas giant Gazprom declined to
submit an expected bid for the Greek
public gas corporation, Depa.
Visit comes amid reports
that further spending
cuts may be demanded
PARIS
BY DAVID JOLLY
The French market regulator said Mon-
day that it had fined LVMH Mot Hen-
nessy Louis Vuitton, the luxury giant
controlled by Bernard Arnault, 8 mil-
lionfor havingbuilt instealthits stake in
Herms International. LVMH immedi-
ately said it would appeal the decision.
The fine, equivalent to $10 million,
was handed down for the seriousness
of the successive breaches of public dis-
closure requirements, which consisted
in concealing each stage of LVMHs
stakebuilding in Herms, the Financial
Markets Authority said in a statement,
adding that circumvention of the rules
intended to ensure transparency, which
is so vital to orderly markets, must be
punished to the same extent as the dis-
ruption it causes.
Under French securities law, the reg-
ulator could have imposed a fine of up to
10 million.
Mr. Arnault began building his stake
in 2002, starting with 4.9 percent just
belowthe 5 percent threshold at which a
shareholder must announce his hold-
ing.
Then, in October 2010, he announced
that he had built up a 14 percent stake in
Herms, stunning the market and, in-
deed, Herms itself.
Mr. Arnault has since raised the stake
to 22.6 percent, but maintains that he is
a strategic, long-term investor and is
not seeking control of the smaller com-
pany.
According to the authorities, LVMH
used a type of opaque derivatives
known as equity swaps to quietly build
its shareholding in Herms, below the
radar of investors and regulators, even
as it disguisedthe growingstake inits fi-
nancial statements.
The judgment hinged on a technical
point, that LVMH should have an-
nounced its holding in June 2010, rather
than the following October.
In a statement, LVMH expressed its
astonishment at the great weakness of
this decision, both on legal grounds and
the completely erroneous analysis of
the facts its shows.
The company said it would immedi-
ately take the case to the Paris Court of
Appeals.
The drama has transfixed the French
business world, pitting Mr. Arnault, one
of the worlds richest men, against Her-
ms, a 175-year-old company that is one
of the most iconic names in luxury.
The Herms family the Dumases,
the Puechs and the Guerrands have
fought him at each step, including with
the filing last year of a criminal case al-
leging insider trading, and a new civil
action last month in which they are
seeking to have the equity swaps can-
celed.
The Herms family has also created a
joint holding to lock up more than half
the companys shares, ensuring they
can maintain control whatever Mr.
Arnaults intentions.
LVMH, in spite of the legal chal-
lenges, has made out handsomely from
its shareholding, with a paper profit of
about 2 billion.
Delays in implementing an
overhaul of the public sector
have put Athens in a difficult
bargaining position.
MADRID
BY RAPHAEL MINDER
Portugals finance minister, Vtor Gas-
par, unexpectedly resigned Monday
amida prolongedrecessionthat citizens
have attributed largely to austerity
measures that he helped enforce in ac-
cordance with the demands of the coun-
trys international creditors.
Mr. Gaspar, an economist who had
previously worked at institutions in-
cluding the European Central Bank,
joined the center-right coalition govern-
ment shortly after Pedro Passos Coelho
was elected prime minister in June 2011.
He was put in charge of implementing
the terms of the 78 billion, or $102 bil-
lion, international bailout that Portugal
negotiated just before the election with
the International Monetary Fund, the
European Commission and the E.C.B.
While the troika of creditors praised
Mr. Gaspars worktokeepPortugal with-
in the terms of the bailout, the finance
minister cameunder increasingcriticism
at home. He was held responsible for the
budget cuts and other austerity mea-
sures that have been blamed for keeping
Portugal in recession and lifting the un-
employment rate to almost 18 percent,
compared with 12 percent when Mr. Pas-
sos Coelho came to power.
Mr. Gaspar will be replacedas finance
minister by the secretary of state for the
treasury, Maria Lus Albuquerque. One
of her first challenges is likely to be to
negotiate with the creditors for another
easing of Portugals budgetary targets.
Amid soaring unemployment and
shrinking domestic consumption, Por-
tugal has repeatedly missed its targets,
closing 2012 with a budget deficit of 6.4
percent of gross domestic product com-
pared with a goal of 5 percent.
In his letter of resignation, Mr. Gas-
par cited the political and budgetary
tensions that came to the fore in April,
after Portugals constitutional court
struck down as discriminatory part of
the governments plan to cut benefits
for civil servants and pensioners. The
ruling required the government to
design a newausterity package to try to
keep its finances on track, but that in
turn helped fuel protests, including an-
other general strike last week.
He cites the pressures
of imposing bailout terms
amid widespread protests
FRANKFURT
BY JACK EWING
Unemployment in the euro zone contin-
ued its steady rise in May, according to
data published Monday, underscoring
the human effects of a downturn that
has lasted a year and a half.
The jobless rate in the 17 countries
that belong to the euro zone was 12.1
percent in May, adjusting for seasonal
effects, according to a report fromEuro-
stat, the E.U. statistics agency. That fig-
ure compared with 12 percent in April,
which was revised down from the 12.2
percent reported earlier. Based on the
revised figures, unemployment in May
was a record high.
Eurostat estimated that 19.2 million
people in the euro area were jobless in
May, an increase of 67,000 from April.
For all 27 countries in the European Un-
ion, the unemployment rate was un-
changed at 10.9 percent. The European
bloc expanded to 28 countries on Mon-
day when Croatia officially joined.
Joblessness in the euro zone has been
rising almost without interruption since
early 2008, when the financial crisis
began, decliningonlybrieflyat thebegin-
ning of 2011. Analysts see little prospect
of a sustained decline any time soon.
While economists expect the euro
zone economy to stabilize this year,
growth will probably remain too slowto
generate large numbers of jobs.
Nor is there muchhope of government
policies that would stimulate growth.
European leaders agreed last week on a
plan to combat youth unemployment,
which rose to 23.8 percent in May in the
euro zone from23 percent a year earlier.
The youth jobs plan calls for accelerated
spending of 6 billion, or $7.8 billion, a
sum that some analysts said was too
small to make a big dent in the problem.
On Wednesday, Chancellor Angela
Merkel of Germanywill host other Euro-
peanleaders at a conference inBerlinon
youth employment. Economists said,
however, that such efforts did not ad-
dress the underlyingcause of unemploy-
ment, namely a prolonged recession and
a lack of credit. Political leaders have
beenreluctant to share the cost of recap-
italizingbanks or totake other measures
that would allowlending to resume.
The measure that offers the greatest
potential for job creation in the short to
medium term is an easing of credit con-
ditions, Marie Diron, an economist
who advises the consulting firmErnst &
Young, said in a statement. This would
allow companies to invest and as a re-
sult recruit in the euro zone.
The European Central Bank will hold
its monetary policy meeting Thursday,
but it is not expected to introduce more
stimulus to the euro zone economy. Are-
ductioninthebenchmarkinterest rate, to
0.25 percent froma record lowof 0.5 per-
cent, is possible, but many say such a cut
would do little to encourage lending in
troubled countries like Spain and Italy.
Banks in those countries are trying to
cope with rising numbers of problem
loans and are reluctant to lend no matter
how cheaply they can borrow from the
E.C.B. Meanwhile, the central bank re-
mains reluctant topurchasegovernment
securities as a way of flooding the econo-
my with liquidity, as the U.S. Federal Re-
serve and Bank of England have done.
Eurostat also reported Monday that
inflation in the euro zone rose to an an-
nualized rate of 1.6 percent in June from
1.4 percent in May because of a surge in
energy prices. While inflation remains
below the E.C.B.s target of about 2 per-
cent, the uptick is likely to provide a fur-
ther argument against increasing the
benchmark interest rate.
Compounding the banks challenge,
the figures released Monday showed
that there remained a big difference in
economic performance among euro
zone countries. The divergence makes it
difficult for the E.C.B. to formulate a
monetary policy that fits all members.
Unemployment rates in Spain and
Greece were about 27 percent in May,
with youth unemployment well above
50 percent. At the other end of the scale,
unemployment was 4.7 percent in Aus-
tria and 5.3 percent in Germany. Both
had youth jobless rates below9 percent.
If there was any good news, it was
that unemployment may not go up
much more. An end to the euro zone
labor market downturn is not yet immi-
nent, Martin van Vliet, an economist at
ING Bank, wrote in a note to investors.
However, with the recession across
the euro zone petering out, the peak in
unemployment should not be too far
away, either.
Analysts fear that growth
will remain too weak
to generate new positions
FRANCISCO SECO/THE ASSOCIATED PRESS
Vtor Gaspar pushed through budget cuts that critics say have kept Portugal in recession.
Portugals finance minister resigns
Jobless rate
increases
to 12.1%in
euro zone
France fines
LVMHover
its holding
of Herms
Banks accused of blocking
market for derivatives
LONDON
BY MARK SCOTT
European antitrust regulators on Mon-
day accused some of the worlds largest
banks of collusion to block competition
fromthe credit derivatives market.
The EuropeanCommissionsaid it had
issued the complaint against the firms,
including Citigroup and JPMorgan
Chase, after finding evidence that they
had tried to prevent exchanges fromen-
tering the credit derivatives business
from2006 to 2009.
The commission, which oversees an-
titrust regulation, said a two-year inves-
tigation found evidence that the global
banks had worked with the Internation-
al Swaps and Derivatives Association, a
trade body, and the data firm Markit to
block new entrants in part of the deriv-
atives market.
In particular, the firms actions
stopped both Deutsche Brse and the
CMEfromgaining financial information
needed to enter the market for credit-
default swaps.
These financial instruments are like a
form of insurance that allows investors
to be paid in full if the underlying bond
defaults. Currently, they can be traded
bilaterally between firms through the
so-called over-the-counter market,
though new regulation is requiring de-
rivatives to be handled through clear-
inghouses, financial intermediaries that
guarantee trades if one side cannot pay.
It would be unacceptable if banks
collectively blocked exchanges to pro-
tect their revenues from over-the-
counter trading of credit derivatives,
the European Unions competition com-
missioner, Joaqun Almunia, said in a
statement.
The 13 banks involved in the case are
Bank of America Merrill Lynch,
Barclays, Bear Stearns, BNP Paribas,
Citigroup, Credit Suisse, Deutsche
Bank, Goldman Sachs, HSBC, JPMor-
gan, Morgan Stanley, Royal Bank of
Scotland and UBS, as well as the Inter-
national Swaps and Derivatives Associ-
ation and Markit.
In a statement, the International
Swaps and Derivatives Association said
it was confident that it had acted prop-
erly and had not broken European anti-
trust rules.
The European Commissions anti-
trust powers include levying fines of as
much as 10 percent of a firms global an-
nual sales, though fines are typically
much lower.
E.U. says it has proof
that 19 firms colluded on
trading in credit swaps
Regulators say Arnault
used stealth as he
amassed shares in rival
The measure that offers
the greatest potential for job
creation in the short
to medium term is an easing
of credit conditions.
INTERNATIONAL HERALD TRIBUNE 18 | TUESDAY, JULY 2, 2013
. . . .
business
WITH
finance economy
NEW YORK
BY PRADNYA JOSHI
Most employees who leave a company
are typically offered modest severance
in some cases a corporate pension,
andperhaps a party heldby co-workers.
For many chief executives of corpora-
tions, the rewards are far, far richer.
Executives who choose to retire or
are forced to retire often receive mil-
lions when they leave. And despite
years of public outcry against such
deals, multimillion-dollar severance
packages are still common.
In 2012, the biggest package went to
James J. Mulva, who stepped down as
chief of ConocoPhillips after 10 years, ac-
cording to an analysis by Equilar of the
10 largest exit packages. His total: about
$156 million. As with all chief executives
on the list, his exit sum is on top of sala-
ry, bonus and other compensation re-
ceived while working for the company.
We calculated severance pay as the
total of anyamounts giveninconnection
with end of service as C.E.O., said
Aaron Boyd, director of governance re-
search at Equilar.
In Mr. Mulvas case, much of the pay-
out came fromthe market value of stock
gains he received. But he also receiveda
cash severance, a bonus and additional
retirement distributions.
ConocoPhillips saidthat the paypack-
ages had been fully disclosed to share-
holders and that they were the same
pension and benefits programs as de-
scribed in the proxy statement as any
other retiring executive.
The vast majority of Mulvas com-
pensation that he earned during his
long and successful career as an execu-
tive remained in the form of company
stock at his time of retirement, Aftab
Ahmed, a spokesman for Conoco-
Phillips, said in an e-mail.
Among Equilars top 10, four were
former chief executives of large oil and
gas companies, including Sunoco and El
Paso Corp. Typically you are seeing
these big energy companies that tend to
have these big payouts upon retire-
ment, Mr. Boyd said.
In some cases, retiring chief execu-
tives will continue to receive millions
years after their retirement. In addition
to his exit package of $46 million in 2012,
Edward D. Breen, formerly the chief of
the conglomerate Tyco International,
received deferred shares, valued at
$55.8 million, in 2013. Mr. Breen, who re-
mains chairman, will also receive $30
million more as a lump-sum pension
payment in 2016 as part of his employ-
ment agreement, Equilar said.
Brett Ludwig, a Tyco spokesman, said
the companys success inlarge part re-
sults fromkey strategic decisions made
by Mr. Breen and the Tyco board to cre-
ate five new publicly held companies,
each of which is a leader in its respec-
tive field, adding that Mr. Breens pay
reflects the increase in value of Tycos
shares.
At other times, huge payouts go to ex-
ecutives as a result of takeovers.
Douglas L. Foshee received millions
after El Paso, the energy company he
led, was taken over by Kinder Morgan.
Extreme exit packages for chief exec-
utives became more common during
the hostile-takeover era of the 1980s,
when the so-called golden parachute
proliferated. Boards realized that with-
out the promise of compensation, exec-
utives would be unwilling to negotiate
deals to sell their companies if an out-
side takeover would force them into the
unemployment line. Provisions were
written into employment agreements
that provided compensation like exten-
ded health insurance benefits and lump-
sum payments equivalent to several
years worth of salary.
They became larger in an era when
executives were resistant to having
companies sold and having new man-
agement come inandbasicallyfiringthe
C.E.O., said Mark Kennedy, an assist-
ant professor at Imperial College Busi-
ness School in London. Nobody had
any idea howbig they would become.
Mr. Kennedy, a co-author of a paper
about such practices with Peer C. Fiss of
the University of Southern California
and Gerald F. Davis of the University of
Michigan, said that more than 60 per-
cent of Fortune 500 companies had
golden parachutes in place by 1990.
Today, about 82 percent of the chiefs of
companies inthe Standard&Poors 500-
stock index are entitled to some type of
cash payment if they are replaced upon
a change in control, according to GMI
Ratings, a corporate governance firm.
Amid public anger over ballooning
compensation, such contracts often be-
came more complex and opaque. And
many companies dispute that current
severance payouts or enhanced retire-
ment packages are really golden para-
chutes, designed to offer soft landings
in the event of takeovers. However they
are characterized, hefty packages for
departing executives are still common.
The main reformthat I would like to
see is not have severance agreements
that are soft landings for executives
who did a poor job, Mr. Kennedy said.
Shareholders are starting to push
back against packages that may seem
excessive.
Laws like the Sarbanes-Oxley act of
2002 and the Dodd-Frank act of 2010 in-
tendedtotrytoclawbackpayfromexec-
utives when it was undeserved. But a
2011 study by Jesse M. Fried, a law pro-
fessor at HarvardUniversity, andNitzan
Shilon, then a law student there, found
that effective clawback policies were
lacking at most S.&P. 500 companies.
If you actually read what these
policies say, they are not very robust,
Mr. Fried said. They all stem from the
same basic problem: The directors are
not paying with their own money.
Some companies have renegotiated
their goodbye packages with departing
executives. Vikram S. Pandit, the
former chief of Citigroup, who is not on
the top-10 list, agreed to forfeit a $26.6
million retention package from 2011
after he was forced out in October. The
bank said in its proxy that he did not
receive a severance payment or special
treatment of his outstanding awards as
part of his separation fromCiti.
But the board awarded him $6.7 mil-
lionas a 2012 bonus, basedonthe perfor-
mance of the company that year.
Golden parachutes cost
companies millions,
despite public outcry
They all stem from the same
basic problem: The directors
are not paying with their own
money.
Latest onus on low-wage workers: Pay by plastic
NEW YORK
BY JESSICA SILVER-GREENBERG
AND STEPHANIE CLIFFORD
A growing number of American work-
ers are confronting a frustrating predic-
ament on payday: To get their wages,
they must first pay a fee.
For these largely hourly workers, pa-
per paychecks and even direct deposit
have been replaced by prepaid cards is-
sued by their employers. Employees
can use the cards, which work like debit
cards, at A.T.M.s to withdrawtheir pay.
But in the overwhelming majority of
cases, using the card involves a fee. And
those fees can quickly add up. One pro-
vider, for example, charges $1.75 tomake
a withdrawal from most A.T.M.s, $2.95
for a paper statement and $6 to replace a
card. Some users even have to pay $7 in-
activity fees for not using their cards.
The fees can take such a big bite out of
paychecks that some employees end up
making less than the minimum wage
once the charges are taken into account,
according to interviews with consumer
lawyers, employees andstate andfeder-
al regulators.
Devonte Yates, 21, who earns $7.25 an
hour working a drive-through station at
a McDonalds in Milwaukee, said he
spent $40 to $50 a month on fees associ-
ated with his JPMorgan Chase payroll
card. Its prettybad, he said. Theres
a fee for literally everything you do.
Certain transactions with the Chase
pay card are free, according to a fee
schedule.
Many employees said they have no
choice but to use the cards: Some
companies no longer offer common
payroll options like ordinary checks or
direct deposit.
At companies where there is a choice,
it is oftenmore intheory thaninpractice,
according to interviews with employees,
state regulators and consumer advo-
cates. Employees said they were often
automatically enrolled in the payroll
cardprograms andconfrontedwithapile
of paperwork if they wanted to opt out.
We hear virtually every week from
employees who never knew there were
other options, and employers certainly
dont disabuseworkers of that idea, said
Deyanira Del Rio, an associate director
of the Neighborhood Economic Develop-
ment Advocacy Project, which works
with community groups in NewYork.
Taco Bell, Walgreen and Wal-Mart
Stores are among the many well-known
companies that offer prepaid cards to
their workers; the cards are particu-
larly popular with retailers and restau-
rants. And they are quickly gaining mo-
mentum. In 2012, $34 billion was loaded
onto 4.6 million active payroll cards, ac-
cording to the research firmAite Group.
Aite said it expected that to reach $68.9
billion and 10.8 million cards by 2017.
Companies and card issuers, which in-
clude Bank of America, Citigroup and
Wells Fargo, say the cards are less ex-
pensiveandmoreefficient thanchecks
a calculator on Visas Web site estimates
that a company with 500 workers could
save $21,000 a year by switching from
checks to payroll cards. On its Web site,
Citigroup trumpets howthe cards guar-
antee pay on time to all employees.
The largest issuer of payroll cards is
NetSpend of Austin, Texas. Chuck Har-
ris, the companys president, said it at-
tracted companies by offering conveni-
ence to employees and cost savings to
employers. We built a product that an
employer can fairly represent to their
employees as having real benefits to
them, he said.
Sometimes, though, the incentives for
employers to steer workers toward the
cards are more explicit.
In the case of the NewYork City Hous-
ing Authority, the authority stands to re-
ceive $1 for everyemployee it signs upto
Citibanks payroll cards, according to a
contract reviewed by The New York
Times. Sheila Stainback, a spokeswom-
anfor theagency, notedthat it hadanan-
nual budget of $3 billion and that about
430 employees had signed up for cards.
For Natalie Gunshannon, 27, another
McDonalds worker, the owners of the
franchise that she worked for in Dallas,
Pennsylvania, she said, refused to de-
posit her pay directly into her checking
account at a local credit union, which
lets its customers use its A.T.M.s free.
Instead, Ms. Gunshannon said, she was
forced to use a payroll card issued by
JPMorgan Chase. She has since quit her
job at the drive-through window and is
suing the franchise owners.
I knowI deserve to get fairlypaidfor
my work, she said.
The franchise owners, Albert and
Carol Mueller, said in a statement that
they comply with all employment, pay
and work laws and try to provide a pos-
itive experience for employees. McDon-
alds itself, noting that it is not named in
the suit, says it lets franchisees deter-
mine employment and pay policies.
On some of its payroll cards, Net-
Spend charges $2.25 for out-of-network
A.T.M. withdrawals, 50 cents for balance
inquiries via a representative, 50 cents
for a purchase using the card, $5 for
statement reprints, $10 to close an ac-
count, $25 for a balance-protection pro-
gram and $7.50 after 60 days of inactiv-
ity, accordingtoanApril presentationby
the company reviewed by The Times.
Problems arise whenemployers man-
date the use of prepaid cards. In 25
states, employers are allowed to forgo
paper checks and offer direct deposit or
payroll cards; in the remaining states,
regulations are less clear and employ-
ers are taking a risk by not offering a pa-
per-check option, too, according to re-
search by Madeline K. Aufseeser, an
analyst at Aite. It is unclear how many
employers offer payroll cards.
For low-wage employees, the fees can
lead to unusual solutions.
Krystal McLemore, 22, makes $7.65 an
hour at a Taco Bell in Missouri. She said
she was told to sign up for a payroll card.
(Taco Bell says it offers direct deposit
andavoluntaryoptionof payroll cards as
an added convenience for employees.)
But she grew tired of being charged
$1.75, in addition to the A.T.M. fees, to
withdraw cash. After a tip from a co-
worker, Ms. McLemore realized she
could reduce her charges if she took out
all of her wages once a month. Now, sup-
plied with one of the most modern bank-
ing products, Ms. McLemore has a de-
cidedly old-fashioned way of handling
her pay: It is stacked in a shoe box in
her closet in $10s and $20s.
NIKO J. KALLIANIOTIS FOR THE NEW YORK TIMES
Natalie Gunshannon and her daughter in Dallas, Pennsylvania. The McDonalds franchise she worked for required her to use a payroll card. She quit and is suing the owners.
NEW YORK
BY GRETCHEN MORGENSON
Whenwe made our annual forayintothe
executive pay gold mine in April, chief
executives earnings for 2012 showed
what appeared to be muted growth on
the year. The $14 million in median over-
all compensationreceived by the top 100
chief executives was just a 2.8 percent
increase over 2011, the figures showed.
Well, what a difference a few months
and a larger pool of chief executives
make. According to an updated anal-
ysis, the top 200 chief executives at pub-
licly traded companies with at least $1
billioninrevenue actuallygot a bigraise
last year, over all. The research,
conducted for The New York Times by
Equilar, the executive compensation
analysis firm, foundthat the medianpay
package in 2012 came in at $15.1 million
a leap of 16 percent from2011.
So muchfor the ideathat shareholders
werefinallygettingthroughtocorporate
boards on the topic of reining in pay.
At least the stock market returns gen-
erated by those companies last year ex-
ceeded the pay increases awarded to
their chiefs. Still, at 19 percent in 2012,
that median return was only three per-
centage points higher than the pay raise.
In other words, it is still good to be
king.
Because the data show only chief ex-
ecutives pay, they do not reveal how
good it still is to be a prince. Brian Foley,
an independent compensation consul-
tant in White Plains, New York, pointed
out that the 2012 compensationof theNo.
2 executives at some of those companies
would have vaulted them to the top
ranks on the chief executive roster.
The interesting thing is that there
are people at these companies that
make as much or more than other
C.E.O.s, Mr. Foley said. Imsure its a
case of Look at what the C.E.O. has; I
want more of that.
Lawrence J. Ellison, the founder and
chief executive of Oracle, the software
company, is a familiar face on the pay
charts and is ranked No. 1 this year. And
had his two top lieutenants been in-
cluded, they, too, would have landed
among the top five on the list. Safra A.
Catz, Oracles chief financial officer and
a co-president, and Mark V. Hurd, also a
co-president, each received packages
worth $52 millionin2012. (Mr. Hurd, you
might remember, received severance of
more than $12.2 million when he left
Hewlett-Packard in 2010.)
As usual, cash pay for many of the
managers pales next to the value of the
stock and option grants they received.
Median cash compensation was $5.3
million last year, while stock and option
grants came in at $9 million.
Stock grants are clearly where the ac-
tion is, and their value can really add up.
Equilars analysis calculates the medi-
an value of stock holdings of these top
chief executives at $51 million.
The trouble is, stock grants, which are
supposed to create an incentive to im-
prove a companys performance, are
also where pay excesses and discon-
nects arise, compensation consultants
say. Howthe boards measure corporate
performance can create pay problems
by failing to align long-term incentives
with shareholders interests.
That is a significant lapse, given how
hefty the incentive awards of stock or
options can be. Performance shares
generally comprise at least 50 percent
of a typical chief executives long-term
incentive award, consultants say.
The median of combined stock and
option awards last year for the 200 chief
executives on the list was 60 percent of
pay. But individual cases can be far lar-
ger. Mr. Ellison received $90.7 million in
options in 2012, or 94 percent of his
nearly$96.2 millionintotal pay. Over all,
Mr. Ellisons compensation was up 24
percent from last year; his sharehold-
ers returns, meanwhile, were negative
22 percent in the companys fiscal year,
which ended in May.
Mr. Ellisonwas hardly alone inreceiv-
ingboatloads of stockin2012. Amongthe
five top chief executives receiving com-
pensation packages that were at least
double those of last year, stock and op-
tion awards which can vest over sev-
eral years provided the major kick.
Those executives included Robert A.
Kotick of Activision Blizzard, a software
publishing company; James Q. Crowe of
Level 3 Communications, a communica-
tions network company; and Mark G.
Parker of Nike. Mr. Kotick received
stock awards worth almost $56 million,
or 86 percent of his total. Of Mr. Crowes
$40.7 million in pay, stock and option
grants amountedto$37 million, or 91 per-
cent of the total. At Nike, Mr. Parkers
stock and option awards were 77 percent
of his $35.2 million in compensation.
At least shareholders of Level 3 and
Nike made money on their stocks in fis-
cal 2012: gains of 36 percent at Level 3
and 30 percent at Nike. Activisions
holders were not so fortunate: Their
companys shares lost 12 percent.
Boards typically assess an enter-
prises performance not only internally
against what occurred in previous
years, but also externally, against a peer
group of companies.
Far too often, though, measures used
by company boards to evaluate perfor-
mance are focused on short-term re-
sults. They often miss a crucial element
that determines long-term success: the
ability to innovate.
We need compensation that is
aligned to long-term value drivers, like
innovation, said Mark Van Clieaf, a
managing director at MVC Associates
International, anorganizationconsulting
firm. Yet at probably 70 to 80 percent of
companies, there are no metrics for
measuringthe impact of newproducts or
services that were launched.
Companies that do not weigh innova-
tion in deciding pay, he added, are es-
sentially rewarding the status quo and
failing to reward moves to keep a com-
pany strong in the long term, including
farsighted efforts to invest in research.
Among the few companies to include
an executive pay performance measure
based on innovation is 3M, Mr. Van
Clieaf said. Its New Product Vitality In-
dex measures the percentage of the
companys total sales from products in-
troduced in the last five years.
In an analysis for The Times, MVC
Associates International compared fi-
nancial statements andexecutive payat
three technology companies: Google,
Qualcommand Xerox.
Using data from Morningstar, Mr.
Van Clieafs firm analyzed each com-
panys researchanddevelopment costs,
return on invested capital and stock
performance over the last five years. He
and his colleagues also calculated each
companys economic profit, which is
after-tax income excluding acquisitions
or divestitures that year, minus a
charge for the capital used to generate
that income. Then they compared those
figures with the pay dispensed to the
five executives at each company who
were the highest paid over the period.
The differences were striking. Not
surprisingly, spending on research and
development over the last five years
was high at both Google (averaging 13
percent of revenue) and Qualcomm (22
percent). Sizable returns on invested
capital were a result at both companies:
Google averaged 18 percent a year,
while Qualcommaveraged 16 percent.
At Xerox, it was another story. Re-
searchanddevelopment costs averaged
4 percent, while return on invested cap-
ital was 2.5 percent. Given that the typ-
ical cost of capital for a technology com-
pany is at least 8 percent, those figures
would suggest that Xerox is earning
less than its capital costs.
The pace of change in corporate pay
practices has been glacial, even as the
growth in pay has exploded. Dysfunc-
tional performance metrics are a root
cause, experts say.
How much of the pay is driven by
right time, right place, and howmuch is
driven by truly sustained, multiyear
performance thats still in place X
years out? Mr. Foley said. What I
would like to see is not just performance
criteria that are robust and meaningful
but also awards that are at risk for a
meaningful period of time.
Not in our lifetimes, but in our chil-
drens, perhaps?
STEPHEN LAM/REUTERS
Lawrence J. Ellison, center, the chief of Oracle, was the highest-paid executive last year,
receiving nearly $96.2 million in total pay, a 24 percent increase fromthe year before.
Prepaid cards replace
checks, and a thicket of
fees cut into salaries
Theres a fee for literally
everything you do.
Exit packages still sweet
for those at the very top
Innovation is a missing factor in executive compensation
Boards tend to reward
short-term profits and
set stock awards too soon
EXECUTI VE PAY REPORT
TUESDAY, JULY 2, 2013 | 19 THE GLOBAL EDITION OF THE NEW YORK TIMES
. . . .
Tribune bolsters TVholdings
NEW YORK
BY MICHAEL J. DE LA MERCED
AND BRIAN STELTER
The Tribune Co. agreed on Monday to
buy 19 television stations in the United
States for about $2.7 billion, making it
one of the countrys biggest owners of
commercial local TV outlets amid a
groundswell of consolidation in the in-
dustry.
The stations are in 16 regions, includ-
ing Denver, Cleveland and St. Louis,
Missouri, and many of their local news
broadcasts are ranked first or second in
their markets. They will complement
Tribunes 23 existing stations and its
WGNAmerica cable channel. Tribune is
buying the stations fromLocal TVHold-
ings, a company owned by the invest-
ment firmOak Hill Capital Partners.
The deal comes less than a month
after Gannett agreed to buy the Belo
Corporationfor about $1.5 billion, nearly
doubling its local television holdings. In
that transaction, which is expected to
NEW YORK
BY MICHAEL J. DE LA MERCED
AND MARK SCOTT
Nokia agreed on Monday to buy
Siemenss half of a telecommunications
equipment joint venture for about 1.7
billion as Nokia continued to struggle
with challenges in its core business.
Once the reigning handset maker,
Nokia has failed to maintain market
share, particularly for smartphones, in
the face of competition from Apples
iPhone and a tide of phones from Sam-
sung and others that run on Googles
Android operating system.
By acquiring the 50 percent stake in
NokiaSiemens Networks that it does not
already own in a deal worth $2.2 billion,
analysts said Nokia had secured owner-
ship of a profitable business to prop up
its balance sheet, as it continued efforts
to turnaround its cellphone operations.
This increases the range of strategic
options Nokia has in the future,
Janardan Menon, a telecommunica-
tions analyst at Liberum Capital, wrote
in a research note on Monday. Nokia is
acquiring this asset at a very attractive
price, well belowwhat an I.P.O. or trade
sale could bring in the future.
Under the terms of the deal, Nokia
said it would pay 1.2 billion to Siemens
for the joint venture and 500 million in
the formof a secured loan fromthe Ger-
man company that must be repaid one
year after the transaction is completed.
Nokias chief executive, Stephen A.
Elop, suggested that while Nokia was
purchasing all of Nokia Siemens, the
agreement might be an intermediate
steptowarda potential sale of the equip-
ment venture.
The company has no plans to inte-
grate Nokia Siemens into its existing
operations, and the venture will remain
a separate entity with its current man-
agement, Mr. Elop said on Monday.
As the deal is closed, we will contin-
ue to strengthen N.S.N. as a more inde-
pendent entity, Mr. Elop said. As for
the future for Nokia Siemens, we have
consistently said that there are a range
of options available.
Investors have interpreted Mr. Elops
comments to mean that Nokia may be
prepared to sell all or part the business
to a single buyer, or to investors through
an initial public offering. Nokia had 4.5
billion in net cash on hand at the end of
the first quarter, and Mr. Elop said the
timing was right to complete the deal.
Economically, the transaction some-
what stands on its own, he said. We
felt that the purchase was very attract-
ive for Nokias shareholders, its custom-
ers and its employees.
Nokias share price climbed 3.7 per-
cent inHelsinki onMonday, while shares
of Siemens rose 2.2 percent in Frankfurt.
The agreement comes as little sur-
prise. Siemens had indicated that it
wanted to divest its stake to focus on its
industrial andenergyoperations. Andan
agreement binding Nokia and Siemens
expired in April, freeing each to explore
potential deals for their holdings.
Siemens reportedly had held discus-
sions with private equity firms about
selling its stake. The company is selling
or spinning off several business units,
including its solar power division, to fo-
cus on profitable areas like transporta-
tion and health care.
With this transaction, we continue
our efforts to strengthen our focus on
Siemens core areas of energy manage-
ment, industry and infrastructure, Joe
Kser, the chief financial officer of
Siemens, said in a statement.
Nokia Siemens, which has roughly
60,000 employees worldwide, was cre-
ated in 2007 through the combination of
the network infrastructure businesses
of Nokia and Siemens. It now claims
about 20 percent of the market for the
latest generation of wireless data net-
works, commonly known as Long Term
Evolution.
Mark Scott reported fromLondon. Kev-
in J. OBrien contributed fromBerlin.
technology media business
WITH
David
Carr
THE MEDI A EQUATI ON
In a refracted media world where infor-
mation comes from everywhere, the
line between two isms journalism
and activism is becoming difficult to
discern. As the U.S. news media have
pulled back from international cover-
age, nongovernmental organizations
have filled in the gaps with on-the-
scene reports and Web sites. State-
houses have lost reporters who used to
provide accountability, so citizens have
turned to digital enterprises, some of
which have partisan agendas.
The question of who is a journalist
and who is an activist and whether
they can be one and the same contin-
ues to roar along, most recently in the
instance of Glenn Greenwalds report-
ing for The Guardian on the secrets re-
vealed by Edward J. Snowden.
Sometimes, a writers motives or
leanings emerge between the lines over
time, but you need only to read a few
sentences of Mr. Greenwalds blog to
knowexactly where he stands. Mr. Gre-
enwald is an activist who is deeply sus-
picious of government and the national
security apparatus, and he is a zealous
defender of privacy and civil rights.
He is also a journalist.
Taxonomy is important, partly be-
cause when it comes to divulging na-
tional secrets, the law grants journa-
lists special protections that are
afforded to no one else. To exclude
some writers from the profession is to
leave them naked before a government
that is deeply unhappy that its secret
business is on wide display.
In that context, activist has be-
come a code word for someone who is
driven by an agenda beyond seeking in-
formation on the publics behalf. I found
out as much last week when an article I
wrote with a colleague about WikiLeaks
called Alexa OBrien an activist.
Ms. OBrien is certainly that. She
played a crucial role in the digital out-
reach of Occupy Wall Street, was in-
volved with the U.S. Day of Rage rally
and began covering the Bradley Man-
ning trial partly to protest the lack of in-
Penguin
and Random
House wrap
up merger
NEW YORK
BY JULIE BOSMAN
Random House and Penguin on Mon-
day completed their planned merger,
creating the biggest and most powerful
book publisher in the world.
The new company, Penguin Random
House, will control more than25 percent
of the English-language consumer book
market, and more than 25 percent of the
trade book market in the United States,
giving it unmatched leverage against
Amazon.com, a growing force in the in-
dustry.
Bertelsmann, which owns Random
House, and Pearson, which owns Pen-
guin, announced the merger in October,
saying that Bertelsmann would control
53 percent of the company and Penguin
47 percent. Since then, the merger has
sailed through regulatory approvals in
the United States and Europe, as well as
China, Canada and other countries.
The new company would have more
than 10,000 employees, 250 independent
publishing imprints and about $3.9 bil-
lion in annual revenue.
Markus Dohle, the chairman and
chief executive of Random House who
will take on the role of chief executive of
the new company, announced the final-
ization of the merger in an e-mail on
Monday to employees.
Today, we are Penguin Random
House, he wrote. You should be proud
of what youve accomplished and what
we are all now a part of: the first truly
global trade book publishing company.
Together, we are even better positioned
to fulfill our core purpose: to bridge au-
thors and readers by publishing the
very best books.
Bertelsmann acquired Random
House in 1998 for more than $1 billion.
David Shanks, the chief executive of
Penguin Group USA, has stepped down
and will be a senior adviser to Mr. Dohle
and the executive team, Mr. Dohle said
in his letter to employees. John Makin-
son, the head of Penguin Group since
2002, will be the chairman of Penguin
RandomHouse.
There were no immediate plans for
laying off employees or closing imprints.
Journalism,
even when
its activism
formation and transparency in the case.
But she also describes herself as an
independent journalist, and for that mat-
ter, so have I in a previous column. She
asked for (and received) a correction in
The NewYork Times, pointing out that I
had cited her work in my column.
You are reading my journalistic
work, using my journalistic work, cap-
italizing off my journalistic work, and
linking to my journalistic work about
the largest criminal investigation ever
into a publisher and its source, she
wrote from Fort Meade, Maryland,
where she has been comprehensively
transcribing the Manning trial.
In other words, if I believed she was
executing a political agenda rather
than a journalistic one, why was I ref-
erencing her work?
The notion of journalist as political
and ideological eunuch seems silly, even
to some who call themselves journalists.
Truth is not the hole in the middle of
the doughnut, it is on the doughnut
somewhere, a veteran reporter whom
I worked with at an alternative weekly
in Minneapolis once told me.
What he meant was that articles that
strive only to be in the middle moving
fromone hand to the other in an effort
to be nicely balanced end up going
nowhere. I was just out of journalism
school, brimming with freshly taught
tenets of fairness and objectivity, and
already those values were in question.
Still, the fight between objectivity
and subjectivity is a fairly modern one.
In the 1800s, journalismwas underwrit-
ten by powerful people, the government
or political parties. It was only when an
economic incentive for information ab-
sent a political agenda took hold that an
independent press also emerged.
It makes sense that as the financial
rewards for traditional journalism have
eroded, advocacy journalism has
gained new traction. It is now up to the
consumer to assemble a news diet of
his or her choice, adding in news that is
produced by people who have skin in
the game.
We are beginning to realize that
journalists come in a variety of shapes
and sizes and come with a variety of
commitments, said Jay Rosen, a jour-
nalism professor at New York Univer-
sity. It isnt that the fact that someone
is an activist is irrelevant, its just that
it does not necessarily mean they are
the opposite of a journalist.
In the instance of Mr. Snowden and
his leaks, something of a hybrid model
for the big story arose. Mr. Snowden
was said to have chosen Mr. Green-
wald as a conduit for a leak because he
felt they shared values. The matching
ideologies of source and journalist
made the story happen in the first
place. Then The Guardians global
presence and historically liberal audi-
ence provided a sturdy platform, and
its newsroom offered editorial muscle.
Janine Gibson, the editor in chief of
The Guardians Web site in the United
States, oversaw the coverage. She said
that a lot had changed in the new edit-
orial landscape, but that articles still
had to hold up under intense scrutiny.
I think to call Glenn an activist is a
red herring, an attempt to put him in a
box and minimize what he does, she
said. He has a point of view, but he is
meticulous and forensic in his ap-
proach and is extremely careful about
getting it right.
There are people in government and
in the news media who believe that Mr.
Greenwald is not a journalist, and
should be prosecuted for his role in
publishing national secrets.
It is not a matter of being an activ-
ist or a journalist; its a false dicho-
tomy, Mr. Greenwald said in a phone
call from Brazil, where he lives. It is a
matter of being honest or dishonest. All
activists are not journalists, but all real
journalists are activists. Journalism
has a value, a purpose to serve as a
check on power.
And as a journalist and activist, Mr.
Greenwald could not resist a jab. I
have seen all sorts of so-called objec-
tive journalists who have all kinds of
assumptions in every sentence they
write, he said. Rather than serve as
an adversary of government, they
want to bolster the credibility of those
in power. That is a classic case of a cer-
tain kind of activism.
I take his point, with a few caveats.
Journalists are responsible for follow-
ing the truth wherever it may guide
them. Both Ms. Gibson and Mr. Green-
wald said that they would quickly fol-
low the Snowden story even if it led to
something that questioned his motives
or diminished his credibility. But I do
think that activism which is admit-
tedly accompanied by the kind of deter-
mination that can prompt discovery
can also impair vision. If an agenda is
in play and momentum is at work,
cracks may go unexplored.
That is not to say that Mr. Green-
walds work is suspect, only that the
tendentiousness of ideology creates its
own narrative. He has been every-
where on television taking on his crit-
ics, which seems more like a campaign
than a discussion of the story he
covered.
Activists can and often do reveal the
truth, but the primary objective re-
mains winning the argument. That in-
cludes the argument about whether a
reporter has to be politically and ideo-
logically neutral to practice journalism.
VINCENT YU/AP
The Guardian reporter Glenn Greenwald
is an advocate for privacy and civil rights.
Nokia to buy out
Siemens in venture
Stock of both companies
climbs on news of deal
valued at 1.7 billion
POOL PHOTO BY CHRIS SWEDA
A mayoral debate on WGNin Chicago. The channels owner, Tribune Co., has reached a $2.7 billion deal to buy channels in 16 U.S. regions.
close by the end of the year, Gannett will
pick up 20 television stations owned by
Belo.
Another of the biggest station owners
in the country, Sinclair, has spent about
$2 billion acquiring a series of smaller
station owners in the last year and a
half, and it has said it is on the lookout
for more such opportunities.
But the Tribune deal eclipses the oth-
ers. It comes as the company is weigh-
inga potential sale or spinoff of its news-
paper properties, including The
Chicago Tribune and The Los Angeles
Times. Advisers of the company have
been in touch with potential bidders, in-
cluding the Koch brothers, Charles and
David, and the billionaire Eli Broad.
Steve Ridge, president of the media
strategy group at Frank N. Magid Asso-
ciates, said 2013 will go down as the
year of transformational consolidation,
forever changing the landscape of local
market television ownership and opera-
tion.
Such consolidation is intended to help
media companies gain more scale, giv-
ing them additional negotiating clout
with programming and distribution
partners. It will also give themmore ex-
posure to political battleground states,
where election candidates spend enor-
mous amounts of money on advertising
every two years.
Peter Liguori, the newchief executive
of Tribune, said the combination with
Local TV made his company the No. 1
local TVaffiliate group in America.
Seven of Local TVs 19 stations are af-
filiates of the Fox network. Tribune
already owned seven, and through the
acquisition it will become the biggest
holder of Fox affiliates. The company
will remain the biggest holder of affili-
ates of the CW, a small broadcast net-
work jointly owned by the CBS Corpora-
tion and Warner Brothers.
Tribune indicated that the acquisition
would also benefit WGN America,
which is somewhat obscure and has low
ratings despite being available in about
75 million homes across the country. Mr.
Liguori, a cable veteran, has signaled
that the channel is a priority for him.
Nokia is acquiring this asset
at a very attractive price, well
below what an I.P.O. or trade
sale could bring in the future.
REUTERS BREAKINGVIEWS
Nokias purchase of Siemenss stake
in their joint venture could ease its
reliance on mobile devices. PAGE 22
INTERNATIONAL HERALD TRIBUNE 20 | TUESDAY, JULY 2, 2013
. . . .
While the International Herald
Tribune has endeavored to
ensure, to its satisfaction, the
legitimacy and accuracy of
the advertisements included in
the newspaper at the time of
publication, it cannot accept
liability for loss or damage that
any of its readers may directly
or indirectly suffer or incur as
a result of relying on such
advertisements or in any
dealings with any party placing
such advertisements.
WARNING
READER
1st/Business Class Worldwide
Boutique Consolidator - up to 50%
off. Special fares for round-the-
worlds, cruises & hotels.
Imperial Travel, Virtuoso Member
1-646-216-8816 www.imptrav.com
Business &
Leisure Travel
IN NORTH AMERICA
UNITED STATES AND CANADA
Tel: 866-459-1121
Email: iht@mediasalesplus.com
IN SOUTH AMERICA
ECUADOR
Tel: 4 689 250
Email: luigi_lanterm/@hotmail.com
IN AFRICA
NORTH AFRICA
Tel: 1 733 385
Email: cnhanouna@yahoo.com
EAST AFRICA (out of UK)
Tel: 207 328 7763
Email: tejgrewal@hotmail.com
IN EUROPE
FRANCE
Tel : (33 1) 41 43 92 06
Email: vboyle@nytimesglobal.com
UNITED KINGDOM
Tel : +44 (0)20 7061 3533
Email:
cchambers@nytimesglobal.com
AUSTRIA/GERMANY
Tel: +49 (0)69 71 67 79 10
Email: nhoffmann@nytimesglobal.com
SCANDINAVIA
(Denmark, Finland, Norway,
Sweden)
Tel : +47 55 92 51 92
Email: fgisdahl@mediasales.no
SPAIN
AIM, About International Media
C/ Alcal, 20, o. 403, 4plta.
28014 Madrid (Spain)
Tel. + 34 91 320 37 70
Email: olga.martinez@aboutim.es
IN MIDDLE EAST
ISRAEL
Tel: 972-3-512 17 74
Email: ad-english@haaretz.co.il
For any other countries in the
Middle East, please contact
wpaice@nytimesglobal.com
Tel: +971 4 428 9457
IN ASIA
Tel: +601 2697 4088
Email: Iht@drumediaplc.com
Contact one of the IHT advertising ofces listed below.
Most credit cards accepted
Need to place a classified ad? General
UK +44 (0)20 7061 3533 France +33 1 41 43 92 06
The Americas +866 459 1121 Asia +601 2697 4088
TO PLACE
AN AD CALL
IHT Classifieds
Suncity, headed by Alvin Chau, 39, is
one of more than 200 junket operators
licensed in Macau, the only place in
China where citizens are allowed to
gamble in casinos. The biggest operat-
ors, which also include Neptune,
Golden Group, Jimei and Dore, account
for more than half the monthly junket
turnover of $75 billion.
Despite robust mass market demand,
a crackdown on corruption and graft in
China has seen the supply of millionaire
V.I.P. players to Macau decline over the
past year, prompting junket operators
to seek to diversify their income
streams.
Suncity, which has about $17.4 billion
in monthly gambling turnover, accord-
ing to Mr. Choong, has expanded into
mining, with iron ore operations in In-
donesia.
It has also branched out into financial
services in Hong Kong with 24-hour
trading in securities, foreign exchange
and commodities, plus Chinese real es-
tate, food and beverages, films and oth-
er media. The company has two listed
arms, Sun International Resources and
Sun Century Group.
The trend for larger junket operators,
flush with cash fromthe gambling
boomover the past decade, to diversify
as a hedge against the volatile V.I.P.
gambling sector has
accelerated over the
past year. Operators
like Jimei, which
runs casinos in the
Philippines and plays
host to golf tourna-
ments, have moved
into wealth manage-
ment and securities.
Neptune, which also
uses the name Guangdong Group,
sponsored a high-profile poker tourna-
ment last month, while Dore Holdings
announced it was buying a majority
stake in a Chinese pawn business.
Manuel Neves, head of Macaus
gambling regulator, said the diversific-
ation of junket operators into other in-
dustries fit with the governments at-
tempts to wean the territory off the
gambling industry, although it accoun-
ted for more than 80 percent of govern-
ment revenue last year. For the gov-
ernment, when people talk about Ma-
cau, we want themto not talk about
gaming, he said. We are doing a very
big effort to push the diversification.
Its not an easy task.
The role of the junket operator is
likely to remain crucial to Macaus
gambling sector, as the recovery of
gambling debt is not legally enforce-
able in China. Junket operators bring in
gamblers fromthe mainland and then
find ways to collect any debt the gam-
blers run up.
So even as Suncity invests in other
industries, it is also expanding its
gambling division, having doubled its
work force to 1,200 over the past year.
And it is still short-staffed.
Farah Master is a Reuters correspon-
dent.
Windowon
Wall Street
MI CHAEL J. DE LA MERCED
AND BRI AN STELTER
NEW YORK Over 40 years, John C.
Malone has made his name through
countless displays of shrewd deal mak-
ing that transformed the telecommuni-
cations industry. NowMr. Malone, the
chairman of Liberty Media, appears to
be trying to drumup a newround of
consolidation in the sector where he
first made his fortune.
This time, he is weighing a deal for
Time Warner Cable, according to
people briefed on the matter who were
not authorized to speak publicly. In this
deal, Charter Communications, a cable
operator in which Liberty owns a 27
percent stake, would buy Time Warner
Cable. Should he reach a deal, he will
most likely use the combined company
to roll up other U.S. cable operators,
upending a status quo dominated by gi-
ants like Comcast.
Those possibilities are helping build
expectations for deals in an industry
that investors and some analysts think
is ready for more. Mr. Malone has re-
cently become among the most vocal
proponents, declaring in April that
there is more consolidation yet to be
done.
Investors and analysts have specu-
lated about transactions involving
Cablevision and the privately held Cox
Communications, as well as the satel-
lite television providers Dish Network
and DirecTV.
Shares in several paid-television
companies have risen in the past
month, with stock in Charter and Time
Warner Cable jumping by double-digit
percentages after news reports about
Mr. Malones interest in a deal.
Frothy is probably too polite a
word for the current climate, said
Craig Moffett, a longtime analyst at
Sanford C. Bernstein &Co. who recently
formed his own firm, Moffett Research.
Behind that push are visions of
battles on multiple fronts. Uniting cable
or satellite television companies would
give themmore power in negotiating
with programming providers like Walt
Disney Co. and Viacom, which are de-
manding ever-higher rates for their
channels.
Mergers could also help blunt new
challenges fromcompanies like Intel,
which is working on a subscriber televi-
sion service that would be delivered via
the Internet.
But just as big a target is the broad-
band Internet service that cable compa-
nies also provide. While cable television
is mature and will most likely decline in
the future, Mr. Malone believes broad-
band has only one direction to go: up.
The emerging online rivals to cable
television, like Netflix and Hulu, re-
quire the kind of fast data connections
that companies like Charter supply.
Standing before cable executives in
Denver last September, at the naming
of a theater in his honor, Mr. Malone, 72,
praised high-speed Internet as the
stickiest product that Ive ever seen.
People would give up food before they
would give up the Internet, he added.
One potential source of profits would
emerge if the U.S. government allowed
cable companies to broadly charge
their Internet customers more for
heavy use of data. Comcast is already
testing billing based on use in two small
markets. And Mr. Malone has told in-
vestors that cable companies could sell
various tiers of connectivity in the
future.
Other companies have aimed to
shake up the fields stalwarts, like Com-
cast as well as Verizon and AT&T. Dish
Network has begun a hunt for merger
partners which so far has failed to
land either Sprint Nextel or the wire-
less network operator Clearwire in
the hopes of creating a newpairing of
satellite television and wireless broad-
band services.
Still, Mr. Malone, a former engineer
who built TCI into a giant over decades,
is one of the oldest hands at wheeling
and dealing. People close to himsay
that he is interested in fostering more
cooperation in the cable industry, and
in the past he has criticized Comcast,
the biggest provider, for what he sees
as a lack of initiative.
He wants to assert some leader-
ship, one of these people said.
At the moment, one way of gaining a
bigger podiumfor his views appears to
be in helping Charter pursue a potential
deal for Time Warner Cable.
Libertys chief executive, Gregory
Maffei, met with his counterpart at
Time Warner Cable, Glenn A. Britt, in
late May to sell the benefits of a merger,
the people briefed on the matter said.
They declined to be named because the
talks were private. The meeting did not
conclude with a specific offer, though
Mr. Britt was largely unmoved by the
approach.
Since then, Liberty and Charter exec-
utives have strongly hinted to investors
that they remain interested in a deal,
done only on a friendly basis, in what
observers say appears to be a quiet ef-
fort to move Time Warner Cable share-
holders into the deal camp.
One person close to Mr. Malone cau-
tioned that Liberty and Charter had not
made a firmdecision on what compa-
nies to pursue yet.
Time Warner Cables management is
skeptical and uninterested, though it
would be compelled to consider any of-
fer that delivers a significant takeover
premiumfor shareholders, one of the
people briefed on the matter said.
Acombination of Charter and Time
Warner Cable, which both have nation-
wide coverage, would have about 15
million television subscribers. That
would make it the third-biggest such
service in the United States, behind
only Comcast and DirecTV. The com-
bined company would be the second-
biggest broadband provider, behind
Comcast.
Amerger would give Charter more
regional scale and clout with content
providers. Merging with Time Warner
Cable could allowCharter to cut pro-
gramming costs by close to $400 mil-
lion, according to several analysts.
It would also give the company more
money to chase other deals.
Liberty has also implied that a deal
would provide Time Warner Cable with
a replacement for Mr. Britt, who is ex-
pected to retire this year, in the formof
Thomas M. Rutledge, Charters chief
executive and a longtime cable indus-
try executive.
But any deal could be complex. Time
Warner Cables market value is $32.7
billion, nearly three times Charters
$12.5 billion. And Time Warner Cable
executives are uncomfortable with
many aspects of a potential merger.
They are pressing ahead with their own
strategic plans; they think Charters
market reach does not necessarily
mesh with their own companys, and
they may be wary of the amount of debt
that a transaction would involve.
Not everyone believes that big-ticket
mergers are in the industrys future.
Mr. Moffett said he expected more ac-
tion at the lower end of the market-
place, among the obscure cable compa-
nies that would be better off merging. It
is there that Mr. Malone may find the
most targets.
The small operators simply cant
stand toe-to-toe with the big guys, Mr.
Moffett said. Mr. Malone, he added,
probably thinks that Charter is my
ticket for the fire sale.
Inside the
Markets
FARAH MASTER
REUTERS
MACAU When the junket operator Sun-
city opened its first high-roller baccarat
table at the Wynn Macau casino in 2007
to lure Chinas wealthiest gamblers, the
company had fewer than 30 employees
and no computers or equipment other
than pen and paper.
Five years later, Suncity has emerged
as the dominant operator of junkets
where licensed middlemen act on behalf
of the casinos to attract big spenders by
arranging their travel and accommoda-
tion and handle their gambling credit
in the semiautonomous Chinese city. It
is planning to open its own resort, inde-
pendent of casino stalwarts like Las Ve-
gas Sands, and is expanding into busi-
nesses as varied as mining and films.
Macaus enormous gambling reven-
ue $38 billion last year, six times that
of the Las Vegas Strip owes much to
its V.I.P. junket system.
Nowthe transformation of the
former Portuguese colony froma hot-
bed of crime into a playground for
Chinas nouveaux riches has spawned a
newbreed of junket operators, eager to
shed the industrys shady image and
establish themselves as multinational
conglomerates.
Suncity is a young and very ener-
getic corporate. There is a need to be di-
versified, Choong Yoon Ming, a senior
executive at the company, said in an in-
terview. For future investments, we
would look to expand in different areas,
particularly property, finance and me-
dia. We would look to list other parts of
the business.
The evolution of the junket operators
is welcomed by the authorities, who are
eager to reposition Macau as an all-
around international travel destination,
but could shake up the dynamics of the
worlds largest gambling market.
The junket operators have tradition-
ally worked for the casinos, which rely
on themfor more than two-thirds of
their revenue. Now, leveraging their
extensive customer databases and so-
phisticated resources, the junket oper-
ators could one day start competing
with the casinos.
Macaus junket operators are fully
aware that their network and database
of high-net-worth V.I.P.s is valuable,
said Edmund Lee, a partner at Price-
waterhouseCoopers in Hong Kong who
focuses on the gambling sector.
PAUL SAKUMA/THE ASSOCIATED PRESS
John C. Malone, chairman of Liberty Media, has shown interest in buying Time Warner
Cable. There is more consolidation yet to be done in U.S. cable television, he has said.
Getting bigger could help blunt
newchallenges fromtelevision
services via the Internet.
Shaking up
the game
in Macau
finance companies business
WITH
dealbook
Talk of mergers stirs cable TVindustry
ONLINE: DEALBOOK
Read more about deals and the deal
makers. nytimes.com/dealbook
Junket
operators are
expanding
into property,
finance,
media and
other fields.
WASHINGTON
BY STEVEN LEE MYERS
When the Obama administration lifted
economic sanctions on Myanmar last
year, encouragingU.S. investments after
decades of treating the nation as a pari-
ah, it did so with a significant caveat.
For the first time, effective this week,
U.S. companies investing in Myanmar
must detail in public reports the steps
they have taken to respect human and
labor rights, to protect the environment
and to avoid corruption in an economy
warped by international isolation and
military dictatorship.
The reporting requirement, which
went into effect Monday, represents a
novel and, to some, controversial effort
by the administration to shape business
practices in an emerging economy that
has embarked on a remarkable though
hesitant opening under Myanmars re-
form-minded president, UThein Sein.
U.S. officials said the effort could be-
come a model for other countries that
might someday emerge from sanctions,
like Cuba and Iran. It could also be used,
they said, for countries with records of
corruption or other abuses that have
come under heightened scrutiny after
disasters like the one in a Bangladesh
factory in April that killed 1,129 workers.
While these have been tailored to
Burma, saidDaniel B. Baer, adeputyas-
sistant secretary of state, referring to
Myanmar by its other common name as
amatter of U.S. policy, asimilar set of is-
sues would apply in other places not
only other countries emerging from
sanctions but really any place where
businesses are operating and investing.
The requirements have generated
considerable criticism. Business and in-
dustry groups have complained that
they are onerous and make U.S. compa-
nies less competitive than their Euro-
pean counterparts, which are also surg-
ing into Myanmar.
Human-rights advocates argue that
they are not strong enough and lack
explicit penalties for companies that do
not comply to manage a headlong
rush to invest in an impoverished coun-
try afflicted with ethnic conflicts and
still dominated by the military and
state-owned enterprises that operate
with little transparency.
The U.S. Chamber of Commerce lob-
bied against the rules as the administra-
tiondraftedthemafter President Barack
Obamas decision to lift sanctions last
July. U.S. investment in Myanmar
should be encouraged, not hindered,
said John Goyer, the chambers senior
director for the region. The organization
has called on the administration to ex-
tend trade privileges to Myanmar.
Other countries are not putting sim-
ilar obligations on their own companies,
so it is an additional requirement that
our competitors do not have, Mr. Goy-
er said. Larger companies can put
forth the resources necessary to adhere
to the reporting requirements, but for
smaller companies, it is much more dif-
ficult to do so.
The administration imposed the re-
quirements using the legal authority it
has from a raft of economic sanctions
that were imposed after Myanmar
harshly repressed the opposition move-
ment led by Daw Aung San Suu Kyi, re-
fusing to recognize her partys victory
in elections in 1990. Her party has since
been legalized, and last year she won a
seat in Parliament.
Mr. Obama has welcomed the initial
steps to loosen the military dictatorship
and met Mr. Thein Sein in the White
House in May, but the sanction laws re-
main on the books and can be reinstated
if the reforms are reversed. The presi-
dent used his authority to waive the
sanctions and grant companies licenses
to operate there. The State Department
then spent months drafting the require-
ments after holding public hearings and
inviting comments fromcompanies and
advocates.
The requirements apply to any com-
pany investing more than $500,000 and
to all investments with the countrys
state energy monopoly, Myanma Oil
and Gas Enterprise.
In addition to ensuring the rights of
workers and providing protections for
the environment, the companies must
report any payment exceeding $10,000
to government agencies or officials, any
contact with Myanmars military, ar-
rangements with private security
companies and the details of any pur-
chase of land or real property.
Companies are required to submit
their reports within 180 days of reaching
the threshold and by July each year
thereafter. The reports will be made
public on the Web site of the newly re-
opened U.S. Embassy in Yangon.
Companies can separately submit to the
State Department a report with any
privileged competitive information that
will not be made public.
U.S. companies are already subject to
laws governing foreign investments, in-
cluding the Foreign Corrupt Practices
Act, and the Securities and Exchange
Commission now requires companies to
report oninvestments inoil, gas andmin-
eral industries overseas under the Dodd-
Frank legislation that Congress adopted
in 2010. But the requirements for Myan-
mar are the first to apply to investments
across the entire economic spectrum.
While there are no explicit penalties
for not reporting, the State Department
expects that most companies will comply
to avoid public criticism from advocates
for human rights and the environment
who are closely watching Myanmars
political and economic opening.
The extent of U.S. investment in My-
anmar so far remains unclear, but offi-
cials and experts expect it could expand
significantly given the countrys popu-
lationof nearly60 millionandthe dearth
of U.S. and European products after so
many years of international isolation.
Dozens of U.S. companies have
already announced investments, in-
cluding prominent ones like Coca-Cola,
General Electric and Ford, which is
opening its first franchise dealership in
Yangon, selling Ranger trucks made in
Thailand and F-150s made in the United
States.
John F. Kwant, Fords director of in-
ternational government affairs for Asia
and Africa, said the lifting of decades of
sanctions had happened so quickly that
companies had little certainty about the
requirements for receiving licenses to
invest. He said the State Departments
requirements clarified the parameters
for investors and, at least in Fords case,
did not seemburdensome.
Michael H. Posner, who was assistant
secretary of state for human and labor
rights until joining the Stern School of
Business at New York University this
year, said the intent of the requirements
was to force companies to examine the
murky connections between the busi-
ness and power in a very embryonic
system, with undeveloped institutions
and regulations.
This is part of a greater trend not
only in the business world, but in our
world generally toward transpar-
ency, said Mr. Posner, who helped draft
the requirements while at the State De-
partment. I think its a very healthy
trend.
Companies must detail
steps they take to respect
labor and environment
NEW YORK
BY WILLIAM ALDEN
The maker of Steinway & Sons pianos
announced Monday that it had agreed
to be acquired by the private equity firm
Kohlberg & Co. in a deal worth about
$438 million.
Steinway Musical Instruments stock
jumped at the start of trading Monday,
rising more than 15 percent, to just
above $35 a share.
The deal is the latest twist for the 160-
year-old piano maker, whose instru-
ments can be found in concert halls and
livingrooms aroundthe world. Inrecent
years, the company, which is based in
Waltham, Massachusetts, has had to ad-
just to a weak economy and changing
cultural tastes.
In March, the company reached an
agreement to sell Steinway Hall, the 88-
year-old building across the street from
Carnegie Hall in Manhattan where
renowned pianists and amateurs alike
have tried out pianos.
In buying Steinway, Kohlberg & Co.
plans to accelerate its global expan-
sion, while ensuringthe artisanal manu-
facturing processes that make the com-
panys products unique are preserved,
celebrated and treasured, Christopher
W. Anderson, a Kohlberg & Co. partner,
said in a statement.
The company, founded in 1853 by
Henry Engelhard Steinway and his
three sons, expanded rapidly to become
the worlds largest piano manufacturer
by 1860.
The companywas acquiredbySelmer
Industries in 1995 and, under the name
Steinway Musical Instruments, went
public the following year. In addition to
its flagship pianos, the company sells
trumpets, saxophones, French horns,
drums and other instruments.
The deal provides for a so-called go-
shop period of 45 days in which Stein-
way can invite rival bids. Otherwise, the
transaction is expected to close in the
third quarter of this year.
Private equity firmto acquire
Steinway for $438 million
U.S. orders Myanmar investors to heed rights
LYNN BO BO/EUROPEAN PRESSPHOTO AGENCY
A Coca-Cola bottling plant near Yangon. Other prominent American companies that have
already announced investments in Myanmar include General Electric and Ford.
The reporting requirement
represents a novel effort to
shape business practices
in an emerging economy.
TUESDAY, JULY 2, 2013 | 21 THE GLOBAL EDITION OF THE NEW YORK TIMES
. . . .
TOKYO
BY HIROKO TABUCHI
Business sentiment among major man-
ufacturers in Japan is at its highest in
more than two years, a closely watched
central bank survey showed Monday, a
sign that the economic policies of Prime
Minister Shinzo Abe are continuing to
lift the countrys corporate outlook.
The Tankan, a survey taken by the
Bank of Japan, showedthat the headline
index for major manufacturers rose to 4
for the three months through June, up
from 8 in the previous quarter. It was
the second consecutive quarter of im-
provement.
Analysts had expected the index to
rise to 3, according to a consensus fore-
cast. It was the highest reading since
March 2011, and the first positive read-
ing since September of that year. Dur-
ing the depths of the global economic
crisis four years ago, the reading fell as
lowas 48.
The Bank of Japan calculates the
Tankan by conducting a survey of exec-
utives at the largest Japanese compa-
nies and subtracting the percentage of
respondents who say conditions are
negative from those who say they are
positive.
The Nikkei 225 share average climbed
1.3 percent to a one-month high after the
upbeat reading, closing at 13,852.50, its
third straight session of gains.
The improvement in corporate senti-
ment comes six months into Mr. Abes
bidto revive the Japanese economywith
a combination of aggressive monetary
easing, government stimulus and a
package of promised economic changes.
Animmediate effect of his policies has
been a weaker yen, which has come as a
boon to exporters by inflating the value
of their overseas earnings. Earnings at
Toyota and other big manufacturers
have already gotten a boost from the
tumbling currency.
The Tankan also showed improved
sentiment in the service sector, with the
index for big nonmanufacturing compa-
nies rising 6 points, to 12.
The survey showed a broad-based
improvement of corporate sentiment
from March to June, as widely expect-
ed, Masamichi Adachi, an economist at
JPMorgan Securities Japan in Tokyo,
said in a note.
Economists are now watching to see
whether the positive turn in mood at big
Japanese companies will trickle down
to consumers. On that front, the evi-
dence is mixed.
companies markets business
WITH
Concern in China over shadowbanking
CHINA, FROM PAGE 1
ing industry, which the government is
tryingto tame. Its attempts to reininthe
dodgy lending practices put stock mar-
kets worldwide in a tizzy in late June.
Chinas regulators and a fair num-
ber of economists, policy makers and in-
vestors worry that legitimate banks
are using lightly regulated wealth man-
agement products to repackage old
loans and prop up risky companies and
projects that might not otherwise be
able to borrowmoney.
Analysts warn that shadow banking
is helping fuel the rapid growth of credit
in a weakening economy, which could in
a worse case to a series of bank failures.
This is the biggest uncertainty Ive
seen in my 18 years following the China
market, Dong Tao, an economist at
Credit Suisse, said of shadow banking.
You dont knowhowbanks are deploy-
ing capital. And you dont know the
credit risks.
What banks are doing, analysts say, is
pressing customers to shift money from
the old, regulated part of their opera-
tions savings deposits into the new,
less regulated part high-yielding
wealth management products that can
circumvent government interest rate
controls and be used to finance high-in-
terest loans to desperate customers.
The countrys leaders are so worried
about credit risk that in June the central
bank tightened credit in the interbank
market, where banks typically go to
borrow money from other banks. The
move sent short-term interest rates
soaring, and for a day at least, created a
debilitating credit squeeze.
The stock markets in China calmed
down last week. But financial institu-
tions are hinting that cash is still hard to
come by. Some banks temporarily sus-
pended lending in order to preserve
cash, according to Caixin, the Chinese
business magazine.
Other banks are raising cash by offer-
ing a new slate of wealth management
products. Nearly every major Chinese
bankis sellinga short-termwealthman-
agement product that has to be com-
pleted by the end of June, according to a
telephone survey. China Merchants
Bank did not respond to requests for an
interview.
Many of the investments pay 6 per-
cent annual interest, which is far above
the highest savings deposit rate set by
bank regulators: 3.3 percent.
Consumers withdraw money from
their regular savings account and put it
into a wealth management product that
promises a much higher rate. Usually
banks will have higher-yielding products
at the end of each quarter, said Wang
Yanan, a 24-year-old accountant who
works in Shanghai. If I happen to have
money at those moments, Ill buy some.
Although the products are popular,
their disclosure is often poor. Bank em-
ployees insist the principal is guaran-
teed, but contracts for wealth manage-
ment products are usually vague,
simply noting there could be risk. Most
offer little detail about where the money
will be invested.
Much of the money, analysts say, is
lent to property developers and local
government financing vehicles, areas
that have government officials worried
because of an explosion in property de-
velopment and soaring housing prices.
Regulatedbanks will not make the loans
because the borrowers are too risky.
So the loans are often made off the
balance sheet, and therefore outside the
purview of bank regulators, which is
why experts call it shadow banking.
They are made at higher interest rates,
so everyone wins the borrower, the
banks and the investor of the wealth
management product as long as the
borrower can repay.
The banks now have these dark
pools of money, said Joe Zhang, a
former investment banker and the au-
thor of Inside Chinas Shadow Bank-
ing: The Next Subprime Crisis? He
said, To finance deals they usually
have a trust company stand in the
middle and simply put their stamp on it.
The trust companies get a fee for that
but often they do next to nothing. The
bank does all the work.
The explosive growth of wealth man-
agement products began about five
years ago, enticing Chinese banks, big
and small, to engage in shadowbanking.
By the end of last year, Chinas shad-
ow banking activity was valued at $6
trillion, up from about $3 trillion in 2010
and equal to 69 percent of the countrys
gross domestic product, according to a
report released last month by J.P. Mor-
gan.
Now, even state-run banks are doing
shadow lending, extending financing to
companies in high-risk sectors.
Who is responsible for the loans is not
always clear, and that is where every-
one starts getting nervous.
In a newspaper opinion piece last
year, Xiao Gang, the former Bank of
China chairman and now the countrys
top securities regulator, referred to
shadow banking as fundamentally a
Ponzi scheme.
The government has so far tolerated
shadowbankingbecause gettingridof it
is all but impossible, analysts say.
Wealthy customers have grown accus-
tomed to getting better returns, and a
large segment of the economy is desper-
ate for capital and cannot easily gain ac-
cess to regular bank loans, largely be-
cause of government restrictions. But
they are willing to pay the shadow
banks 9, 10, even 15 percent interest.
And to make that possible, Chinese
banks are raising pools of capital and
creating increasingly complex financial
instruments with outside institutions to
make off-the-books loans to those will-
ing to pay a premium.
Perhaps the biggest worry, though, is
that this booming business could be un-
done by a major business failure that
forces bank customers to suffer losses.
This is a major problem, said Ding
Shuang, a Citigroup analyst based in
Hong Kong. Many of these are just
three months, and they need to be rolled
over. So if theres a default that could
change things. This is a problemregula-
tors are very aware of.
China opens
investigation
into dealings
by Glaxo
SHANGHAI
BY DAVID BARBOZA
The British pharmaceutical giant
GlaxoSmithKline said on Monday that
the authorities here were investigating
whether senior managers working for
the company in China were involved in
economic crimes.
A spokesman in London said that
GlaxoSmithKline was unaware of the
nature of the police investigation in
China but that the companys execu-
tives were cooperating.
Two weeks ago, The Wall Street Jour-
nal reported that a whistle-blower had
sent information to GlaxoSmithKlines
board of directors claiming that for
years the sales staff in China had en-
gaged in the widespread bribery of
doctors to prescribe drugs.
The company said on Monday that it
hadthoroughly investigatedthose accu-
sations and concluded earlier this year
that there was no evidence of bribery or
corruption in its Chinese operations.
GlaxoSmithKline has said in regulato-
ry filings that the U.S. Justice Depart-
ment and the Securities and Exchange
Commission contacted the company as
early as 2010 about possible violations of
the Foreign Corrupt Practices Act in its
overseas operations, including China.
The company referred to the contacts as
discussions, rather than an investiga-
tion, and said that they were continuing.
The troubles at the company, which is
also known as GSK, come at a time
when a growing number of multination-
al corporations are coping with bribery
and corruption accusations in China.
The Chinese police made their an-
nouncement over the weekend. The
public security bureau in the city of
Changsha, in Hunan Province, posted a
brief statement online announcing an
investigation into senior managers at
GSKChina for economic crimes.
It is still unclear what is the precise
nature of their investigation, Simon
Steel, a company spokesman, said on
Monday, adding, We will cooperate.
Over the weekend, the Chinese police
also reportedly detained GlaxoSmith-
Kline managers in Shanghai, Beijing
and Changsha, The South China Morn-
ing Post, which is published in Hong
Kong, reported on Monday.
Inquiry comes as firms
face growing number
of bribery accusations
Optimism
is returning
at Japanese
businesses
1 2
3
$?
Fee
A developer approaches a bank, asking
for a loan. Since the developer is unsecured,
it is willing to pay a high rate of 9 percent.
The bank agrees, but it must first raise the
funds to proceed.
To finance the loan, the bank entices depositors to make large
deposits by promising them a return of 6%. Because that exceeds the
3.3% maximum allowed by China, the bank sets up a special wealth
management product, which it offers via a trust company to keep the
transaction off the banks books.
BANK
LENDING OFF THE BOOKS Banks in China frequently use trust companies as a means of keeping loans off their balance
sheets. This can be profitable to the banks, but can also put investors at risk. Banks have devised many complex
variations, but the following is one example of how shadow lending can work:
DEVELOPER
BANK
DEPOSITORS
TRUST COMPANY
Again working via the trust company, the bank, now armed with the money from depositors, arranges the loan to the
developer. The developer pays 9% interest, plus a large fee. The bank pockets the fee and the difference between the 9% it gets
from the developer and the 6% it pays to depositors. Both sides of the transaction are kept off the banks books but if the
construction firm fails, depositors could be left in the lurch.
BANK
DEVELOPER DEPOSITORS
TRUST COMPANY
9%
Interest
+ fee
$
Loan
$
Deposit
6%
Interest
Fee
For a fee, both the deposits and the loan are
held nominally on trust companys books.
Monday, July 1
United States Last Chg 12 mo.%
World markets
The Americas
Europe and Middle East
Asia
U.S. Dow Jones indus. 15,063.15 +153.55 +19.5
U.S. S.&P. 500 1,623.79 +17.51 +22.2
U.S. S.&P. 100 728.50 +7.88 +19.6
U.S. Nasdaq composite 3,447.99 +44.74 +21.0
U.S. NYSE composite 9,212.61 +99.91 +21.3
U.S. Russell 2000 992.74 +15.26 +27.9
Mexico IPC 40,882.66 +259.36 +3.1
Canada S.&P./TSX 12,129.11 closed +6.2
Brazil Bovespa 47,254.13 203.00 10.3
Argent. Merval 3,012.78 +36.51 +32.8
Chile Stock Market select 3,972.16 57.51 8.4
Euro zone Euro Stoxx 50 2,622.62 +20.03 +21.6
Britain FTSE 100 6,307.78 +92.31 +14.8
Germany DAX 7,983.92 +24.70 +29.8
France CAC 40 3,767.48 +28.57 +23.5
Italy FTSE MIB 15,459.57 +220.29 +15.4
Spain IBEX 35 7,907.10 +144.40 +17.6
Switzerland SIX 7,741.07 +58.03 +29.3
Sweden OMX 30 1,165.64 +14.64 +19.0
Russia RTS 1,277.22 closed 0.3
Czech Rep. Prague Stock Exch. 876.05 2.22 0.5
Israel TA-25 1,195.48 +4.98 +13.0
Japan Nikkei 225 13,852.50 +175.18 +56.1
H.K. Hang Seng 20,803.29 unch. +9.3
Australia All Ordinaries 4,689.66 85.75 +14.8
China Shanghai composite 1,995.24 +16.04 9.1
S. Korea Kospi 1,855.73 7.59 +2.0
India S.&P. CNX Nifty 5,887.30 +45.10 +14.3
Taiwan Taiex 8,036.00 26.21 +12.1
Singapore Straits Times 3,140.93 9.51 +10.3
Thailand SET 1,451.90 unch. +24.0
Indonesia Jakarta composite 4,777.45 41.44 +22.9
Interest rates
10-year govt. Ask yield Chg 12 mo. ago
Britain 2.415% 0.030 1.632%
France 2.317 0.021 2.661
Germany 1.716 0.012 1.506
Japan 0.873 +0.035 0.801
United States 2.477 0.040 1.582
Britain 0.276% +0.011 0.242%
France 0.160 +0.002 0.142
Germany 0.027 0.006 0.012
Japan 0.099 +0.001 0.094
United States 0.139 0.007 0.202
1-year govt
Britain 99.936% +0.001 0.470%
France 0.025 +0.004 0.035
Germany 0.014 +0.001 -0.250
Japan 99.975 +0.001 n.a.
United States 0.033 0.015 0.085
3-month govt Ask yield Chg 12 mo. ago
Britain (bank) 0.50% 0.50 (Mar. 5) 0.50%
Canada (overnight) 1.00 unch. (May. 14) 1.00
Euro zone (refinancing) 0.50 0.25 (May. 7) 1.00
Japanese (overnight) 0.10 unch. (Jun. 25) 0.10
United States (prime) 3.25 0.75 (Dec. 16) 3.25
Benchmark rates Last Latest chg
Agricultural City Units Delivery Last Chg
Futures
Metals, energy
Corn Chicago $/bu July 6.75 0.05
Cotton N.Y. $/lb. July 0.83 unch.
Soybeans Chicago $/bu July 15.73 +0.08
Wheat Chicago $/bu July 6.47 0.01
Rice Chicago $/cwt July 15.69 0.05
Cocoa N.Y. $/ton July 2,170.00 24.00
Coffee N.Y. $/lb. July 1.20 unch.
Sugar N.Y. cts/lb. Oct. 16.70 +0.32
Orange juice N.Y. cts/lb. July 130.75 +0.85
Aluminum London $/m. ton 3 mo. 177,300 +800
Copper N.Y. cts/lb. Sep. 3.16 +0.10
Gold N.Y. $/tr.oz. Aug. 1,258.20 +34.50
Palladium N.Y. $/tr.oz. Sep. 683.00 +22.30
Platinum N.Y. $/tr.oz. Oct. 1,380.00 +40.10
Silver N.Y. $/tr.oz. Sep. 0.20 unch.
Brent crude London $/bbl. Aug. 102.73 +0.57
Light sw.crude N.Y. $/bbl. Aug. 97.94 +1.38
Natural gas N.Y. $/mln.BTUs 3 mo. 3.57 unch.
Cross rates
Australia 1.082 1.412 1.646 1.085 0.033 1.143 1.031
Brazil 2.219 2.897 3.376 2.226 0.068 2.345 2.115
Britain 0.657 0.858 - 0.659 0.020 0.694 0.626
Canada 1.049 1.370 1.596 1.052 0.318 1.109 -
China 6.133 8.008 9.332 6.152 0.187 6.482 5.845
Denmark 5.712 7.458 8.691 5.730 0.173 6.037 5.444
Euro zone 0.766 - 1.165 0.768 0.023 0.809 0.730
India 59.375 77.727 90.589 59.717 1.805 62.918 56.591
Japan 99.670 130.15 151.68 - 3.024 105.35 95.000
Mexico 12.874 16.810 19.590 12.900 0.000 13.606 12.269
Russia 32.953 43.030 50.148 33.100 - 34.830 31.408
Singapore 1.264 1.651 1.924 1.268 0.039 1.336 1.205
S. Africa 9.908 12.937 15.077 9.900 0.301 10.472 9.443
S. Korea 1135.17 1482.30 1727.50 1138.80 34.446 1199.84 1081.42
Sweden 6.659 8.696 10.135 6.681 0.202 7.039 6.348
Switzerland 0.946 1.235 1.440 0.949 0.029 - 0.902
Taiwan 29.958 39.119 45.590 30.100 0.910 31.665 28.553
U.S. - 1.306 1.522 1.003 0.030 1.057 0.953
One One
One Swiss Can.
$1 1 1 100 ruble franc doll.
Exchange rates
Euro 0.766 0.003 - - 1.165 0.004
Dollar - - 1.306 0.005 1.522 0.001
Pound 0.657 unch. 0.858 0.003 - -
Swiss franc 0.946 0.001 1.235 0.006 1.440 0.004
Yen 99.670 0.550 130.15 1.210 151.68 0.910
Asia
Australian dollar 1.082 0.012 1.412 0.010 1.646 0.017
Chinese renminbi 6.133 0.004 8.008 0.024 9.332 0.004
Hong Kong dollar 7.755 0.001 10.128 0.037 11.803 0.006
Indian rupee 59.375 0.148 77.727 0.461 90.589 0.270
Indonesian rupiah 9920.00 unch. 12955.5 49.600 15098.2 9.920
Malaysian ringgit 3.163 0.005 4.131 0.022 4.814 0.011
Philippine peso 43.000 0.075 56.158 0.117 65.446 0.071
Singapore dollar 1.264 0.004 1.651 0.002 1.924 0.005
South Korean won 1135.17 6.280 1482.30 2.500 1727.50 8.760
Taiwan dollar 29.958 0.021 39.119 0.177 45.590 0.053
Thai baht 30.900 0.220 40.355 0.132 47.030 0.304
Europe
Czech koruna 19.898 0.072 25.987 0.006 30.285 0.090
Danish krone 5.712 0.020 7.458 0.002 8.691 0.028
Hungarian forint 225.10 1.540 293.98 0.878 342.60 2.117
Norwegian krone 6.077 0.010 7.937 0.043 9.249 0.021
Polish zloty 3.318 0.004 4.333 0.011 5.050 0.003
Russian ruble 32.953 0.122 43.030 0.324 50.148 0.210
Swedish krona 6.659 0.044 8.696 0.023 10.135 0.048
Turkish lira 1.918 0.009 2.505 0.002 2.919 0.012
Argentine peso 5.388 0.003 7.037 0.031 8.201 0.010
Brazilian real 2.219 0.013 2.897 0.006 3.376 0.018
Canadian dollar 1.049 0.003 1.370 0.002 1.596 0.003
Chilean peso 503.55 3.750 657.64 2.361 766.40 5.200
Mexican peso 12.874 0.062 16.810 0.017 19.590 0.087
Venezuelan bolivar 6.284 unch. 8.207 0.031 9.564 0.006
Middle East and Africa
Egyptian pound 7.019 unch. 9.167 0.035 10.683 0.007
Israeli shekel 3.623 0.012 4.732 0.003 5.514 0.015
Saudi riyal 3.750 unch. 4.898 0.019 5.708 0.004
South African rand 9.908 0.078 12.937 0.150 15.077 0.125
Major currencies $1 Chg. 1 Chg. 1 Chg. Asia (cont.) $1 Chg. 1 Chg. 1 Chg. The Americas $1 Chg. 1 Chg. 1 Chg.
World 100 The companies with the largest market capitalization, listed alphabetically by region. Prices shown are for regular trading.
A + or indicates stocks that reached a new 52-week high or low.
Abbott Laborat. 35.26 +0.38 44.0 32.05 72.13
Amazon.com 282.1 +4.4 +27.4 215.4 284.0
Apple 410.4 +13.9 27.9 390.5 702.1
AT&T 35.35 0.06 0.1 33.14 39.00
Bank of America 13.07 +0.21 +68.8 7.04 13.83
Berkshire Hath. 170,141 +1541 +37.8 120,700 172,900
Caterpillar 83.08 +0.59 +0.5 79.64 99.49
Chevron 119.7 +1.4 +15.7 99.1 126.4
Cisco Systems 24.60 +0.27 +49.3 15.12 24.82
Citigroup 48.86 +0.89 +85.1 25.24 53.27
Coca-Cola 40.63 +0.52 46.9 35.97 81.12
Comcast 41.04 0.71 +32.2 30.33 43.73
ConocoPhillips 61.44 +0.94 +12.7 52.76 64.31
Exxon Mobil 90.96 +0.61 +9.5 81.24 93.48
General Electric 23.49 +0.30 +16.3 19.44 24.33
Google 889.7 +9.3 +57.7 560.7 915.9
Home Depot 77.12 0.35 +49.2 50.70 79.82
IBM 193.0 +1.9 +0.8 183.1 215.8
Intel 23.94 0.29 7.3 19.36 26.94
J&J 87.22 +1.36 +30.3 66.39 88.59
JPMorgan Chase 53.29 +0.50 +48.5 33.90 55.62
Kraft Foods 55.95 +0.08 +55.9 43.66 57.54
McDonalds 100.2 +1.2 +13.6 84.1 103.6
Merck 46.57 +0.12 +14.5 39.45 49.44
Microsoft 34.48 0.06 +15.3 26.37 35.67
Occidental Petrol. 90.35 +1.12 +11.6 73.58 94.75
Oracle 30.42 0.29 +8.0 27.62 36.34
P&G 78.31 +1.32 +29.9 59.27 82.54
Pepsico 82.30 +0.51 +18.2 68.02 84.25
Pfizer 27.99 0.02 +24.2 22.34 31.08
Philip Morris 87.63 +1.01 +2.3 82.39 96.44
Qualcomm 61.34 +0.25 +13.0 53.56 67.97
Schlumberger 73.26 +1.60 +16.8 59.67 81.56
United Technol. 95.08 +2.14 +31.0 71.84 97.55
UPS 87.47 +0.99 +13.4 70.02 89.03
Verizon 50.38 +0.04 +14.6 41.40 53.91
Visa 186.3 +3.5 +53.3 119.5 184.6
Wal-Mart 75.12 +0.63 +10.0 67.30 79.86
Walt Disney 64.15 +1.00 +34.1 46.70 67.67
Wells Fargo 41.82 +0.55 +28.7 31.43 41.56
The Americas
AmBev (BR) 83.21 0.31 +9.5 73.99 93.80
Ame`r. Mo`vil (MX) 14.19 +0.06 17.9 11.62 18.14
Bradesco (BR) 28.62 0.18 2.4 27.85 38.40
Ecopetrol (BR) 4,080 unch. 16.7 3,850 5,790
Itau Unibanco (BR) 28.56 0.21 +4.8 27.16 36.90
Petrobras (BR) 14.68 0.13 19.8 14.23 24.35
R. Bk of Can. (CA) 61.28 closed +19.7 50.39 64.49
Toronto Dom. (CA) 84.47 closed +6.7 77.99 85.43
Vale (BR) 27.23 +0.18 29.0 26.70 42.60
Middle East and Africa
Saudi Basic In. (SA)92.25 +0.75 +3.4 85.25 98.25
Europe
A-B InBev (BE) 69.18 +0.79 +17.2 55.63 78.66
BASF (DE) 68.59 0.04 +32.2 51.89 75.85
BG Group (GB) 1,132 +13 10.4 1,000 1,350
BP (GB) 457.6 +2.3 +12.5 402.7 484.5
Brit. Am. Tob. (GB) 3,398 +30 +5.9 3,070 3,784
ENI (IT) 15.97 +0.19 0.5 15.25 19.48
Gazprom (RU) 109.1 closed 27.6 107.2 169.5
GDF Suez (FR) 14.98 0.07 17.9 14.12 20.23
Glaxo (GB) 1,663 +15 +15.0 1,322 1,791
HSBC (GB) 692.2 +10.2 +24.0 512.2 770.7
LOre`al (FR) 128.2 +2.0 +44.4 87.6 136.7
LVMH (FR) 127.4 +2.9 +11.1 114.1 143.2
Nestle` (CH) 62.55 +0.60 +11.8 55.10 69.50
Novartis (CH) 67.30 +0.20 +27.6 52.00 73.65
Novo Nordisk (DK) 911.5 +18.5 +9.3 811.0 1,070.0
R. Dutch Shell (GB)2,104 +4 0.5 2,030 2,310
Roche (CH) 234.6 0.4 +44.0 160.2 258.5
Rosneft (RU) 229.4 closed +13.2 192.5 275.4
Sanofi (FR) 79.87 +0.25 +38.3 57.31 86.67
Santander (ES) 5.05 +0.15 +3.4 4.04 6.62
SAP (DE) 55.42 0.84 +23.3 44.71 64.80
Sberbank (RU) 95.42 closed +15.2 82.30 110.74
Siemens (DE) 79.63 +1.98 +26.3 63.06 86.88
Statoil (NO) 126.9 +1.6 7.5 123.0 154.5
Telefo`nica (ES) 10.00 +0.15 +1.4 8.63 11.58
Total (FR) 37.50 0.01 +10.2 33.63 41.84
Unilever (GB) 2,658 4 +27.5 2,067 2,900
Vodafone (GB) 188.5 +0.6 +4.5 154.8 199.9
Volkswagen (DE) 157.1 +1.6 +33.1 118.0 186.7
Asia
Agric. Bank (CN) 2.49 +0.03 2.4 2.40 3.23
Bank of China (CN) 2.72 +0.01 3.2 2.54 3.22
BHP Billiton (AU) 30.94 0.43 +0.7 30.18 39.00
CBA (AU) 67.53 1.65 +28.3 51.55 73.49
CCB (HK) 5.49 unch. +6.4 4.75 6.71
China Life (CN) 13.60 0.09 22.8 13.42 21.92
China Mobile (HK) 81.00 unch. 2.5 75.10 92.55
Chi. Shenhua (HK) 19.80 unch. 24.4 19.70 35.25
CNOOC (HK) 13.16 unch. 11.8 12.26 17.36
Honda Motor (JP) 3,700 +15 +38.9 2,319 4,275
ICBC (CN) 4.03 +0.01 +2.8 3.64 4.47
Mitsubishi UFJ (JP) 631.0 +19.0 +69.6 345.0 732.0
NTT (JP) 5,180 +40 +40.2 3,525 5,550
NTT DoCoMo (JP)154,700 +600 +17.6 112,800 165,800
PetroChina (HK) 8.25 unch. 15.1 7.87 11.28
Rio Tinto (AU) 51.73 0.64 6.2 48.63 72.07
Samsung El. (KR)1,326,00016000 +13.51,091,000 1,576,000
Sinopec (HK) 5.46 unch. 18.6 5.08 9.44
Toyota Motor (JP) 6,060 +70 +94.9 2,817 6,640
TSMC (TW) 108.0 3.0 +35.2 74.3 115.5
Westpac Ban. (AU) 27.97 0.91 +34.3 20.65 34.06
Data are at 1700 U.T.C. Prices are in local currencies.
Source: Reuters Infographics by: CUSTOM FLOW SOLUTIONS
Company 52-wk price range
U.S. Last Chg 12 mo.% Low Last () High
Company (Country) 52-wk price range
U.S. (cont.) Last Chg 12 mo.% Low Last () High
Company (Country) 52-wk price range
Europe (cont.) Last Chg 12 mo.% Low Last () High
For online listings and past performance visit
www.morningstar.com/Cover/Funds.aspx July 1, 2013
T|e dala |r l|e ||sl aoo1e |s l|e r.a.1. supp||ed oy l|e lurd groups lo V0R|l|03TAR. ll |s co||aled ard reloraled |rlo l|e ||sl oelore oe|rg lrars|lled lo l|e llT. T|e llT rece|1es payerl lro
lurd groups lo puo||s| l||s |rloral|or. V0R|l|03TAR ard l|e llT do rol Warrarl l|e qua||ly or accuracy ol l|e ||sl, l|e dala ol l|e perlorarce ol l|des ol l|e Furd 0roups ard W||| rol oe ||ao|e
lor l|e ||sl, l|e dala ol Furd 0roup lo ary exlerl. T|e ||sl |s rol ard s|a|| rol oe deeed lo oe ar oller oy l|e llT or V0R|l|03TAR lo se|| secur|l|es or |r1eslerls ol ary ||rd. lr1eslerls car
la|| as We|| as r|se. Pasl perlorarce does rol guararlee lulure success. ll |s ad1|sao|e lo see| ad1|ce lro a qua||l|ed |rdeperderl ad1|sor oelore |r1esl|rg.
- $ter||ngs; - u$ 0o||ars; Au0 - Austra||an
0o||ars; 0A0 - 0anad|an 0o||ars; 0hF - $w|ss
Francs; 0YP - 0yprus Pounds; 0KK - 0an|sh
Krones; 6 - Euros; hK0 - hK 0o||ars; N0K -
Norweg|an Krones; $EK - $wed|sh Krones; Y - Yen;
ZAP -Pand;
a - asked + - 0ffer Pr|ces; N.A. - Not Ava||ab|e; N.0. -
Not 0ommun|cated; o- New; $ - suspended; $|$ -
stock $p||t; * - Ex-0|v|dend; ** - Ex-Pts; - 0ffer
Pr|ce |nc|. 3 pre||m. charge; * - Par|s exchange; ++
-Amsterdam exchange; e - m|squoted ear||er; x-not
reg|stered w|th regu|atory author|ty. P: H|dd|e of b|d
and offered pr|ce. E: est|mated pr|ce; y: pr|ce
ca|cu|ated 2 days pr|or to pub||cat|on; z: b|d pr|ce.
The marg|na| symbo|s |nd|cate frequency of
quotat|ons supp||ed: d - da||y; w - week|; b -
b|-month|y; f - fortn|ght|y; r - regu|ar|y; t - tw|ce
week|y; m - month|y; | - tw|ce month|y.
005 AB5OLUTE FERFORN T:31 20 5722 110
m KObydr InI'l LId 151.8
d FUlsdr NUlIi LId 227.08
007 ALLAN GRAY
Orbs nv0sl0r 50rvc0s T0um +1 441 26 3000
w AfriCd EqUiIy Rdnd 184.58
1 BANQUE DEGROOF
d Asid FdCifiC FOrf0rmdnCO A 6 23.2
d Asid FdCifiC FOrf0rmdnCO B 33.12
d Asid FdCifiC FOrf0rmdnCO C 6 22.52
d Asid FdCifiC FOrf0rmdnCO O 31.71
d Eq EUr0pO BOhdvi0rdl Vdl A 6 31.87
d Eq EUr0pO BOhdvi0rdl Vdl B 6 30.80
310 GLOBAL 5ELECTON ADV5OR5
r AmOriCdn 5OlOCIi0n H0ldings NV 15.02
r EUr0pOdn 5OlOCI H0ld N.V. Bid 6 10.8
m Ol0bdl 5OlOCIi0n H0ldings NV 1810.3
r Nipp0n 5OlOCI H0ld N.V. Bid 18.41
r 1igOr 5OlOCI H0ld N.V. Bid 273.8
5 GUTZWLLER FOND5 NANAGENENT AG
www.gulzwII0r-fun0s.c0m
T0I.:+41 61 205 70 00
d OUIwillOr OnO 24.50
m OUIwillOr 1w0 CHF CHF 108.50
m OUIwillOr 1w0 U5O 14.0
03 JANE5 RVER CAFTAL CORF.
m III FUnd LId.25/03/11 383.12E
16 NAVERCK CAYNAN 345 4-0658
r NdvOriCk FUnd LOC 840.7E
132 ORB5 NVE5T B0rmu0u 441 26 3000
w Ol0bdl EqUiIy24/03/11 153.78
w Jdpdn EqUiIy U524/03/11 34.31
w LOvOrdgOd EUr024/03/11 6 45.74
w LOvOrdgOd U524/03/11 140.35
w LOvOrdgOd YOn24/03/11 Y 1102.00
w OpIimdl EUr024/03/11 6 2.3
w OpIimdl U524/03/11 78.73
w OpIimdl YOn24/03/11 Y 101.00
w Orbis 5iCdv Ol0bdl EqUiIy24/03/11 6 11.51
w 5ICAVAsid Ox-Jdpdn EqUiIy U5O24/03/11 1.0
w 5ICAV Jdpdn EqUiIy EUr0 Cldss24/03/11 6 22.21
w 5ICAV Jdpdn EqUiIy YOn Cldss24/03/11 Y 332.00
141 FRENER NVE5TNENT FUND5 LTD
c/0 F.O. B0x 1100, Grun0 Cuymun
Fux: 345 4 03
m FrOmiOr Ol0bdl Bd Fd 3828.5
m FrOmiOr Ol0bdl YiOld Fd 2731.1
m FrOmiOr InIl EqUiIiOs FUnd 3280.31
m FrOmiOr 10Idl ROIUrn Fd 1241.42
m FrOmiOr U5 EqUiIy FUnd 507.50
International Funds
For information please contact Clare Chambers
Fax +44 (0)20 7061 3529 | e-mail cchambers@nytimesglobal.com
AIl0rnulv0 nv0slm0nls
1007 FARNNGTON A55ET NANAGENENT LTD
w WinCh. ROsOr. NUlIi. Ov Bd 42.03
82 GEN5 NANAGENENT
www.g0msu0vs0rs.c0m
I0n00n@g0msu0vs0rs.c0m
w OOms L0w V0ldIiliIy ROgUldr U5O 3251.40E
w OOms ROC0vOry ROgUldr U5O 2320.21E
131 OFTNA FUND NANAGENENT
www.0plmu.c0m 441 25 8658
m JENOF Ol0bdl HOdlIhCdrO FUnd A 11.33E
m OpIimd FdrInOrs Ol0bdl FUnd 13.00E
m 1hO OpIimd Fd LId 82.00E
m 1hO OpIimd OisCrOIi0ndry NdCr0 Fd LId 87.5
m 1hO OpIimd FdrInOrs F0CUs Fd Cldss A 14.80
m 1hO O0rsOI EnOrgy Fd LId 4.22E
m 1hO FldIiniUm Jdpdn Fd LId 42.72
m 1hO FldIinUm Fd LId 81.4
25 E. . 5TURDZA5TRATEGCNANAGENENTLTD
T0I :+44 1481 70713 Fux :+44 1481 707127
www.0slur0zu.c0m
m 5IrdIOgiC EvdriCh Jdp Fd LId JFY Cl Y 83255.00
m 5IrdIOgiC EvdriCh Jdp Fd LId U5O Cl 83.
m 5IrdIOgiC Ol0bdl Inn0vdIi0n Fd LId 1213.72
w 5IrdIOgiC Ol0bdl Inn0vdIi0n Fd LId EUR 6 1175.37
EDNOND DE ROTH5CHLD FRFUND
www.00r-prfun0.ch
T: +41 58 818 5 68 E: nf0prfun0@bp0r.ch
d B0nd 6 Cldss A 6 155.15
d B0nd Cldss A 175.88
d EUr0pOdn EqUiIiOs Cldss A 6 135.44
d U5A EqUiIiOs Cldss A 132.01
d QUAN NUlIimdndgOr 5 Cldss A CHF 112.13
d QUAN NUlIimdndgOr 5 Cldss A 6 12.88
d QUAN NUlIimdndgOr 5 Cldss A 130.88
d QUAN NUlIimdndgOr 10 Cldss A CHF 125.7
d QUAN NUlIimdndgOr 10 Cldss A 6 152.1
d QUAN NUlIimdndgOr 10 Cldss A 13.5
d QUAN NUlIimdndgOr 15 Cldss A CHF 113.8
d QUAN NUlIimdndgOr 15 Cldss A 6 14.7
d QUAN NUlIimdndgOr 15 Cldss A 155.5
AIl0rnulv0 Fun0s 0f Fun0s
m Alphd UnC0rrOldIOd 6 Cldss A 6 15.72
m Alphd UnC0rrOldIOd Cldss A 20.55
m Alphd V0ldIiliIy Cldss A EUr0 6 137.82
m Alphd V0ldIiliIy Cldss A U5O 14.08
m Alphd 1rddOrs Cldss A EUr0 6 152.32
m Alphd 1rddOrs Cldss A U5O 12.83
345 5FNNAKER CAFTAL GROUF
www.spnnuk0rcupluI.c0m
m Ol0bdl EmOrging NdrkOIs K131/12/10 111.2
m Ol0bdl Opp0rIUniIy K131/12/10 103.04
25 E. . 5TURDZA5TRATEGCNANAGENENTLTD
T0I :+44 1481 70713 Fux :+44 1481 707127
www.0slur0zu.c0m
d E.I. 5IUrdd 5IrdIOgiC EUrp VdlUO CHF CHF 10.88
d E.I. 5IUrdd 5IrdIOgiC EUrp VdlUO InsIEUR 6 110.8
d E.I. 5IUrdd 5IrdIOgiC EUr0 Bd CHF ACC CHF 84.5
w Nipp0n Or0wIh UCI15 JFY A Y 774.00
w Nipp0n Or0wIh UCI15 JFY B Y 0.00
w Nipp0n Or0wIh UCI15 JFY C Y 501.00
w Nipp0n Or0wIh FUnd LimiIOd Y 80271.00
d 5IrdIOgiC Chind Fdndd EUR 6 175.3
d 5IrdIOgiC Chind Fdndd OBF 123.8
d 5IrdIOgiC Chind Fdndd U5O 2014.82
w 5IrdIOgiC EmOrging EUr0pO Fd EUR Cl 6 30.24
w 5IrdIOgiC EmOrging EUr0pO Fd U5O Cl 45.
d 5IrdIOgiC EUr0 B0nd FO ACC 6 110.
d 5IrdIOgiC EUr0 B0nd FO OI51 6 1030.7
d 5IrdIOgiC EUr0pO VdlUO FUnd 6 132.1
m 5IrdIOgiC EvdriCh Jdp Fd LId JFY Cl Y 83255.00
m 5IrdIOgiC EvdriCh Jdp Fd LId U5O Cl 83.
m 5IrdIOgiC Ol0bdl Inn0vdIi0n Fd LId 1213.72
w 5IrdIOgiC Ol0bdl Inn0vdIi0n Fd LId EUR 6 1175.37
d 5IrdIOgiC U5 N0mOnIUm VdlUO FUnd 10.14
d 5IrdIOgiC Ol0bdl B0nd FUnd RNB 1008.41
d 5IrdIOgiC Ol0bdl B0nd FUnd U5O 2.8
85 TREETOF A55ET NANAGENENT 5A
www.lr00l0pum.c0m
d 1rOO10p C0nv. InIOrn. A 6 234.85
d 1rOO10p C0nv. InIOrn. B 304.48
d 1rOO10p C0nv. InIOrn. C 105.08
d 1rOO10p C0nv. FdC. A 6 255.4
d 1rOO10p C0nv. FdC. B 324.03
d 1rOO10p Ol. Opp.A 6 123.13
d 1rOO10p Ol. Opp.B 127.4
d 1rOO10p Ol. Opp.C 12.80
d 1rOO10p 5OqU0id EqUiIy A 6 103.02
d 1rOO10p 5OqU0id EqUiIy B 10.33
d 1rOO10p 5OqU0id EqUiIy C 130.07
263 TROCADERO FUND5
d Frimd CdpiIdl FUnd A 38.81
d Frimd CdpiIdl FUnd C CHF 1.72
d Frimd CdpiIdl FUnd O 6 284.88
d Frimd Opp0rIUniIy FUnd -A- 131.0
d Frimd Opp0rIUniIy FUnd -B- 6 124.51
d Frimd Opp0rIUniIy FUnd -C- CHF 114.13
d 1r0CddOr0 CdpiIdl H0ldings LId. A 148.3
d 1r0CddOr0 CdpiIdl H0ldings LId. B 6 140.31
r 1r0CddOr0 CdpiIdl H0ldings LId. C CHF .54
17 W.F. 5TEWART HOLDNG5 N.V.
d W.F. 5IOwdrI H0ld. N.V.LisIOd A'ddm5E 244.2
OTHER FUND5
r Arr0wsmiIh FUnd, LId 1340.7
r Ass0CidIOd InvOsI0rs InC. 217.30
m EmOrgO CdpiIdl 2.33
d HdmilI0n LdnO FrivdIO Eq Fd FlC 108.05
m HdUssmdn H0ldings Cldss C 6 2113.82
m HdUssmdnn Hldgs N.V. 240.23
m Ld FdyOIIO EUr0pO FUnd LId 6 220.4
m Ld FdyOIIO H0ldings EUr0 Fd LId Cl A 6 134.4
m Ld FdyOIIO H0ldings U5O Fd LId Cl A 547.8
m Ld FdyOIIO Opp0rIUniIy Fd LId U5O Cl 200.30
w LOdf 5iCdv 2441.03
r NdIIOrh0rn Offsh0rO Fd 13748.70E
The Independent Mark of Quality
Morningstar Analyst Research and Ratings for Funds
www.morningstar.co.uk
INTERNATIONAL HERALD TRIBUNE 22 | TUESDAY, JULY 2, 2013
. . . .
REUTERS BREAKINGVIEWS
Nokia gets a bargain, and a brighter future
Little to celebrate in Croatias E.U. accession
Nokia has got the better of Siemens.
The Finnish mobile phone company is
buying out its German partners stake
in their Nokia Siemens Networks joint
venture for a mere 1.7 billion. Nokia
gets full ownership of this restructured
and profitable telecom-equipment busi-
ness, while reducing its reliance on
handsets. The purchase could also open
the way to future deal-making.
The transaction, equivalent to $2.2
billion, is a bargain, valuing N.S.N. at
just 0.25 to 0.3 times forward sales.
Barclays had put N.S.N.s worth at 0.5
times sales, and says some analysts
were at closer to 0.8 times. Presumably
Nokias existing 50 percent stake in the
business deterred rival bidders, while
its own weak financial position limited
the possible price.
It all goes to highlight the differences
between buyer and seller. Siemens was
desperate to exit a volatile, noncore and
low-margin business that it did not con-
trol. The Munich-based conglomerate
is even helping to finance the deal,
through a 500 million vendor loan
note. For troubled Nokia, N.S.N. looks
predictable, cash generative and with
high margins. Since 2011, N.S.N. has cut
1 billion of costs and shed a quarter of
its staff to focus on mobile broadband
and services. It has nowbeen profitable
for a year and provided 210 million of
net cash to Nokia in the last quarter.
So the move should make Nokia both
more stable and less reliant on mobile
phones, where it is desperately fighting
to reinvent itself. There are promising
signs of growth in its Lumia range of
Windows-based devices. But Apple and
Samsung remain leagues ahead, and
sales of budget feature phones are
shriveling even faster than feared. Some
analysts say N.S.N. could generate two-
thirds of Nokia earnings by 2015.
And a wholly owned N.S.N. is a new
bargaining chip. In time, Nokia could
float or sell the business to a rival at a
much higher valuation. Or if the handset
attack flops, it could quit that business
entirely. Then a sale to Microsoft or
Huawei would allowNokia to reinvent
itself, like its Swedish rival, Ericsson, as
a pure maker and servicer of network
gear. That is perhaps not the future
Nokia investors were buying into. But at
least it is a future. QUENTINWEBB
E.U. governments are expectedly wel-
coming Croatias accession to the Euro-
pean Union as a vote of confidence in
the European project. Zagreb has more
concrete reasons to gloat. It will get
more funds, newfriends and a place at
the grown-ups table. But the real bene-
fits of accession for the country sub-
stantial reformand political stability
are looking less certain.
The former Yugoslav states 12-year
journey toward E.U. membership has
put it under prolonged scrutiny. It was
an incentive for the country to change
somewhat, although a lot remains to be
done. Corruption and organized crime
are still endemic. Red tape, which has
made business unattractive and scared
foreign investors, is rampant. The hope
is that Croatia will work harder on all
those fronts. The risk is that it will not.
Austerity policies of the type advoc-
ated by Brussels have dampened public
enthusiasmin a country whose econo-
my is uncompetitive and weak. Croatia
is in its fifth year of recession, and its
gross domestic product is 10 percent
lower than in 2008. The budget deficit
and public debt will stand at 4.7 percent
and 58 percent of G.D.P. this year, ac-
cording to E.U. forecasts. The unemploy-
ment rate is forecast to reach 19 percent.
E.U. membership will not fix Croa-
tias fiscal issues. It may help increase
foreign investment and push borrowing
costs lower. The biggest gain for the
economy would be the 11 billion, or
about $14 billion, of structural funds
Croatia stands to benefit fromif, that
is, it can find credible ways to spend
them.
Welcoming Croatia will have little ef-
fect on the stagnant European econo-
my, but enlarging to the western Bal-
kans has at least some political appeal.
Croatias membership cannot garner
much excitement at home until voters
see what they gained. Europe, on the
other hand, seems to be on enlargement
autopilot, not seeming to care whether
its newest member is up to the task. As
long as Zagrebs willingness to change
remains unconvincing, there will be few
reasons to rejoice. VIKTORIADENDRINOU
For more independent commentary and
analysis, visit www.breakingviews.com
Inside
Asia
KATHARI NE HOURELD
REUTERS
KARACHI, PAKISTAN Since Pakistans
biggest electricity company was privat-
ized, its headquarters has been looted,
its employees kidnapped and its boss
nearly arrested by the government.
Despite all of that, it is regarded as a
roaring success.
Power cuts lasting 12 hours a day or
more have devastated the Pakistani
economy. The loss of millions of jobs has
fueled unrest in a nuclear-armed nation
already beset by a Taliban insurgency.
The only city bucking the trend is the
violent metropolis of Karachi, Paki-
stans financial heart and that is
thanks to Tabish Gauhar and his team
at the Karachi Electricity Supply Co.
It has consumed every ounce of my
energy, Mr. Gauhar, 42, said in an in-
terview. But we have helped millions
of people.
The newgovernment of Prime Minis-
ter Nawaz Sharif won an election in
May partly because it had promised to
fix the power cuts. Nowmany are won-
dering whether the Karachi utilitys
successful privatization will be re-
peated elsewhere.
Pakistans power companies share
similar problems. Workers are often
corrupt, and influential families rarely
pay bills. The government sells power
belowthe cost of production but pays
subsidies late or not at all. Plants can-
not afford fuel.
At the state-run Peshawar Electricity
Supply Co., the majority of workers are
illiterate, most newhires are relatives
of existing staff members, and 37 per-
cent of the power generated was stolen,
according to a 2011 audit funded by the
U.S. Agency for International Develop-
ment.
Karachi Electricity Supply had all the
same problems when the Dubai-based
private equity firmAbraaj Capital
bought a controlling stake in 2008. Mr.
Gauhar and his Abraaj teamdecided to
slash the work force by a third, cut off
minutes they are back again, said
Muhammad Siddiq, a manager at the
utility.
Local gangs control the illegal lines.
Power company workers who remove
themare often attacked. Ten were
taken hostage in a single occurrence
last month. Amob attacked Mr. Siddiqs
office.
Some slums are held by the Taliban
or gangs, and Karachi Electricity Sup-
ply workers cannot even enter. They
are experimenting with licensing
powerful local businessmen to collect
bills and cut off nonpayers.
But the painful changes have begun
paying dividends. Last year, the com-
pany made its first profit in 17 years.
Theft has fallen 9 percent in four years.
Half of the city, including two industrial
zones, does not have daily power cuts.
It has made a big difference to my
business, said S. M. Muneer, whose
leather and textile factories employ
thousands. I cannot run a textile facto-
ry on a battery frommy car.
Not everyone is happy. Shortages of
natural gas and maintenance problems
still cause long power
cuts. Customers who
do pay bills suffer if
their neighbors do
not. Many cannot af-
ford the bills.
To improve cus-
tomer relations, the
Karachi utility gives
free power to hun-
dreds of charity
schools and provides
uninterrupted or subsidized power to 18
big public hospitals. It has also built
newcall centers, connections and
power plants.
The gleaming Chinese-built natural
gas plant at the Bin QasimPort in Kara-
chi can generate 560 megawatts. But
Pakistan rarely has enough natural gas
for the plant to work at full capacity.
Karachi Electricity Supply blames
that on nationwide gas shortages, but
Sui Southern Gas Co., of which the gov-
ernment owns 70 percent, says that the
Karachi power company owes it $500
million.
Karachi Electricity Supply disputes
the assertion that the figure is that high
and says it is offsetting the payment
against outstanding bills fromgovern-
ment entities that total $720 million.
Weve still got problems, said Syed
Nayyer Hussain, the Karachi com-
panys newchief executive. But at
least weve started.
INTERNATIONAL TRAVELER
HERTZ GLOBAL EXPANDS INEUROPE
Thrifty Car Rental and Dollar Rent A
Car have expanded their presence in
Europe, with more than 135 newloca-
tions at airports and major leisure des-
tinations in France, Spain and Luxem-
bourg. That means 335 Thrifty and 259
Dollar locations across Europe, accord-
ing to Hertz Global, which owns the
brands.
HAWAIIANAIRLINES ADDS ASIATRIPS
FROMNEWYORKTHROUGHHONOLULU
For travelers departing fromKennedy
International Airport in NewYork,
Hawaiian Airlines is nowoffering ser-
vice through Honolulu to Auckland;
Sydney and Brisbane, Australia; des-
tinations in Japan and South Korea;
and Taipei.
By using Honolulu as a transfer
point, the airline is using a hub-and-
spoke plan that has been successful for
fast-growing global airlines like Singa-
pore and Emirates, though there are
significant differences, according to the
airline.
To further encourage travelers to
choose Hawaiian over other airlines
that serve Asia and the Pacific from
NewYork, the airline offers what it
calls a procrastination vacation, a
free stopover of unrestricted length in
Honolulu for those who want a dual-
destination holiday.
MUMBAI
AGGRESSIVE DOMESTIC GROWTH
IS PLANNEDFORAIRASIAINDIA
The budget carrier AirAsia plans to ag-
gressively expand its Indian affiliates
fleet by adding 10 planes a year, the
groups chief executive, Tony
Fernandes, said Monday.
AirAsia India is expected to begin a
domestic service fromChennai in the
fourth quarter of this year. It will focus
on connecting underutilized airports
within India instead of offering services
to the countrys main hubs, Mumbai
and NewDelhi, Mr. Fernandes said.
Indias low-cost aviation sector is de-
veloping slowly, with the three main
budget carriers operating only about
130 planes across the country of over a
billion people. AirAsia will initially con-
centrate on southern India, Mr.
Fernandes said.
Its main competitor out of Chennai
will be the domestic low-cost carrier
SpiceJet. The airline will offer domestic
services only because under Indian reg-
ulations, the countrys carriers cannot
fly on international routes until they
have at least five aircraft and have accu-
mulated five years of operations. (REUTERS)
HONG KONG
SHANGHAI AGENCIES OFFERING
TRAVEL NOW, PAYLATER OPTIONS
Some tour agencies in Shanghai are en-
ticing people to sign up for their pack-
ages by offering travel now, pay
later trips to other destinations in
China, The Shanghai Daily reported
Monday.
The approach allows tourists to re-
fuse to pay for a tour package if they
are not satisfied with the service. Some
agencies are also providing customers
with the option of going on the trip
again.
Datong Travel Agency started the
trend in March when it offered a trip to
the Lingshan Grand Buddha in Wuxi in
neighboring Jiangsu Province, stating
that tourists could refuse to pay if two
of the 12 clauses in the contract were
broken. Another agency, Shanghai
China International Travel Service, has
adopted a similar business model by of-
fering trips to Hainan, Yunnan and Xia-
men.
business
WITH
ONLINE: INSIDE ASIA
Read past columns fromaround the
region. global.nytimes.com/business
nonpayers and destroy illegal connec-
tions.
The moves started a small war.
Employees who had been laid off
offered to work for free because they had
made such fat kickbacks. When manage-
ment refused, thousands of protesters
ransacked the companys headquarters.
They camped outside for months.
Gunmen attacked Mr. Gauhars
house. Workers crossed picket lines
every day, hunkered down on the floors
of police cars. More than 200 employees
of the utility were injured.
We felt very lonely then, said Mr.
Gauhar, who moved fromchief execu-
tive to chairman of Karachi Electricity
Supply earlier this year. When I used
to visit one of our injured employees in
the hospital, it was hard for me to look
themin the eye.
Many in the populist pro-labor govern-
ment vilified the power company. Later,
legislators tried to arrest Mr. Gauhar on
charges that he had not attended sub-
committee meetings in the capital.
After the protests dissipated, Karachi
Electricity Supplys next problemwas
making customers pay. More than a
third of the companys electricity was
stolen in 2009. Those who got bills often
ignored them.
One wealthy patriarch said he could
not possibly start paying because his
colleagues would think he had no influ-
ence left.
Karachi Electricity Supply started
cutting off those who did not pay their
bills. When a transformer burned out in
an area with high theft, the company
asked for two months worth of pay-
ment fromthe areas residents before
replacing it.
The company divided up the city of 18
million. Areas where 80 percent of
people pay bills nowhave no regular
power cuts. Areas with high loss of-
ten crime-ridden, sweltering slums
have long power cuts. Karachi Electri-
city Supply is widely hated in such
places.
Muhammed Fayyaz, who works as a
driver, says his neighborhood often has
as much as 10 hours of cuts per day.
Summer temperatures top 40 degrees
Celsius (104 Fahrenheit), and protests
are frequent.
People block the main road and
throwstones at passing vehicles, he
said.
Mr. Fayyaz lives in a high-theft area.
Stealing power is easy. Makeshift wires
with metal hooks festoon Karachi Elec-
tricity Supplys lines in the sun-baked
streets. Some lead to roadside busi-
nesses. Others head into the distance
atop lines of makeshift bamboo poles.
We clean themup, but in five
JENNIFER S. ALTMAN FOR THE NEW YORK TIMES
Shelly Bond is the executive editor of Vertigo, an imprint of DC Comics that shuns the
traditional superhero category. Vertigo will introduce six new series, starting in October.
BY GEORGE GENE GUSTINES
DC Comics, which overhauled its comic
book lineup of superheroes, including
Superman, in autumn 2011, is now turn-
ing its attention to Vertigo, its strug-
gling imprint for mature readers.
Superheroes are the lifeblood of the
comic book industry and have proved to
be a big draw at the box office. But Ver-
tigo, whose slate includes fantasy, hor-
ror and speculative fiction outside of the
publishers mainstream lineup, has had
difficulty building an audience and de-
veloping newproperties.
DC, whose parent company is Time
Warner, is hoping to change Vertigos
fortune this fall with six new series
premiering from October to December.
The most anticipated project, The
Sandman: Overture, a mini-series by
Neil Gaiman, is to begin on Oct. 30.
Vertigo, which was introduced in 1993,
became known for developing new tal-
ent and presenting illustrated stories
that eschewed the never-ending battles
between superheroes and archvillains.
The new series continue that trend and
include Hinterkind, by Ian Edginton,
which focuses on a post-apocalyptic
world in which the creatures of myth
and legend have returned, and The
Discipline, by Peter Milligan, an erotic
thriller about a woman at the center of a
shadow war that spans eons. No capes
or utility belts are to be found in the mix.
Its so liberating to know that I can
talk about all these wonderful books,
said Shelly Bond, the executive editor of
the imprint, who joined DC Comics a
month before Vertigo began.
The future of Vertigo has been a
source of speculationfor reasons intern-
al and external. In March, Karen Ber-
ger, Vertigos founding executive editor,
left her full-time position. Newconcepts
have struggled to build an audience.
Saucer Country, a series about poli-
tics and alien abductions in the South-
west, whichbeganinMarch2012, hadits
final issue in April with estimated sales
of fewer than 5,700 copies. The top DC
book that month was Batman, with
132,100 copies.
DCs biggest rival is Marvel Comics,
which has 37.59 percent of the market,
just slightly more than DCs 36.75, ac-
cording to John Jackson Miller, who
tracks industry figures on his Web site,
The Comics Chronicles. Vertigo is not
tracked separately. DCs market share
has been steadily rising fromjust under
32 percent in 2008.
The industry overall also has been
growing. Mr. Miller estimated that com-
ic book sales were $700 million to $730
million last year, up from$660 million to
$690 million in 2011.
Other companies, like Image Comics,
have raised their profile as publishers
for creators who want to retain full con-
trol of, andprofits from, their work. The
Walking Dead, the zombie series from
Robert Kirkman, began life at Image.
Although Sandman, which began in
the late 80s, predates the imprint, it was
branded as a Vertigo book in 1993 and
became one of its biggest successes: a
perennial seller of collected editions,
critically beloved, winner of multiple
awards. Sandman helped shape the
career of Mr. Gaiman, who seems to
write in every form these days, includ-
ing fantasy novels, screenplays and
televisionscripts; his most recent novel,
The Oceanat the Endof the Lane, was
published by WilliamMorrowin June.
The most peculiar thing for me
about returning to Sandman is howfa-
miliar it all feels, Mr. Gaiman said.
What is new, however, is the level of at-
tention. When I was writing Sand-
man from 1987 to 1996, I never had the
feeling at any point that approximately
50 million people were looking over my
shoulder scrutinizing ever word. (Mr.
Gaiman has about 1.9 million followers
on Twitter.)
For the six-issue The Sandman:
Overture, Mr. Gaiman has been paired
with J. H. Williams III, an illustrator
known for his moody imagery and inno-
vative page layouts. They are the most
beautiful pages I have ever seen in peri-
odical comics, Mr. Gaiman said. I ask
him to do the impossible, and he gives
me back more than I asked for.
The series will be published every
other month and will alternate with a
special edition of each issue, which will
include more of the artwork (because of
translucent word balloons developed by
the letterer Todd Klein), as well as be-
hind-the-scenes commentary and char-
acter sketches.
Another of Vertigos newseries, The
Dead Boy Detectives, due in Novem-
ber, is tied to the Sandman mythos. It
features two characters that were intro-
duced in Sandman No. 25 from 1991.
The characters, Edwin and Charles, are
boarding school students who died trag-
ically and returned as ghost detectives.
(In the newseries, a girl, whose mortal-
ity status is unknown, will join them.)
Ms. Bond sees comic books as having
been accepted as an integral part of
pop culture with all the TV shows and
film franchises. She is eager to contin-
ue the legacy of Ms. Berger, who was
known for developing emerging talent.
Some good news for Vertigo was
found in an analysis of the imprints
May sales on The Beat, the news blog of
comics culture run by Marc-Oliver
Frisch. The first issue of The Wake, a
10-issue series by the writer Scott
Snyder and the artist Sean G. Murphy,
sold an estimated 45,000 units, the
highest number for a Vertigo comic
book since the year 2000, he wrote.
Mr. Snyder is one of the recent suc-
cess stories for Vertigo. His American
Vampire, which began in 2010, is about
a new breed of those bloodsucking
creatures. The series is on hiatus and
will return in December.
Right now, were in the middle of
Vertigos transformation from a rela-
tivelyshelteredidea andtalent farmto a
much more competitive place, Mr.
Frischwrote. Whether or not this is go-
ing to help DC in re-establishing the
Vertigo brand as a selling point, were
going to find out in the next several
months.
Turning on
the lights
in Pakistan
E.U. ACCUSES BIG BANKS
OF DERIVATIVES COLLUSION
PAGE 17 | BUSINESS FRONT
Rebuilding an imprint of DC Comics, without the capes and utility belts
It has
consumed
every ounce
of my energy.
But we
have helped
millions of
people.
>35
>35
>35
30-35 30-35 30-35 30-35 30-35 30-35 30-35 30-35
30-35
30-35 30-35 30-35 30-35 30-35 30-35 30-35 30-35 30-35 30-35
25-30 25-30
25-30 25-30 25-30 25-30 25-30 25-30 25-30
25-30 25-30 25-30 25-30 25-30
25-30 25-30 25-30
20-25
20-25
20-25 20-25 20-25 20-25
20-25
15-20 15-20 15-20
15-20 15-20 15-20
15-20 15-20
15-20 15-20 15-20
10-15 10-15
10-15 10-15 10-15 10-15 FINLAND
BELARUS
ROMANIA
BULGARIA
GREECE
ALB.
TUNISIA
LIBYA
EGYPT
SAUDI
ARABIA
JORDAN
SYRIA
ISRAEL
LEBANON
MOROCCO
SPAIN
ALGERIA
ITALY
PORTUGAL
DENMARK
MOSTLY
CLOUDY
STATIONARY
COMPLEX
WARM
COLD
SHOWERS
FLURRIES
SNOW
RAIN
ICE
T-STORMS
HIGH
LOW
Travelers forecast
High/low temperatures, in degrees Celsius and
degrees Fahrenheit, and expected conditions.
C..................... Clouds
F .......................... Fog
H........................ Haze
I.............................. Ice
PC.......... Partly cloudy
R......................... Rain
Sh................. Showers
S.......................... Sun
Sn...................... Snow
SS....... Snow showers
T ........ Thunderstorms
W...................... Windy
Abu Dhabi 43/32 109/90 S 43/30 109/86 S
Almaty 29/18 84/64 S 31/16 88/61 S
Athens 29/21 84/70 S 31/22 88/72 S
Bangkok 33/26 91/79 C 33/26 91/79 T
Barcelona 27/18 81/64 PC 26/20 79/68 S
Beijing 36/24 97/75 S 38/25 100/77 PC
Belgrade 28/14 82/57 S 31/17 88/63 S
Berlin 23/15 73/59 PC 24/16 75/61 R
Boston 27/21 81/70 T 29/22 84/72 T
Brussels 23/15 73/59 C 19/12 66/54 R
Buenos Aires 18/9 64/48 F 19/13 66/55 PC
Cairo 33/22 91/72 S 35/23 95/73 S
Chicago 23/15 73/59 PC 24/14 75/57 T
Frankfurt 23/18 73/64 PC 21/15 70/59 R
Geneva 26/15 79/59 Sh 21/12 70/54 R
Hong Kong 31/28 88/82 R 31/28 88/82 T
Istanbul 28/17 82/63 PC 28/20 82/68 S
Jakarta 31/25 88/77 T 30/25 86/77 T
Johannesburg 19/8 66/46 S 20/8 68/46 S
Karachi 33/29 91/84 PC 33/29 91/84 PC
Kiev 24/15 75/59 PC 26/17 79/63 C
Lagos 29/23 84/73 T 28/23 82/73 T
Lisbon 28/16 82/61 PC 30/16 86/61 S
London 18/12 64/54 R 22/15 72/59 Sh
Los Angeles 33/19 91/66 S 32/19 90/66 S
Madrid 33/20 91/68 PC 35/20 95/68 PC
Manila 32/26 90/79 T 32/26 90/79 T
Mexico City 28/10 82/50 T 25/11 77/52 T
Miami 31/26 88/79 T 31/26 88/79 T
Moscow 27/15 81/59 PC 28/17 82/63 PC
Mumbai 31/25 88/77 R 31/25 88/77 R
Nairobi 25/14 77/57 PC 24/14 75/57 C
New Delhi 37/29 99/84 T 37/29 99/84 PC
New York 27/21 81/70 T 29/22 84/72 T
Nice 27/18 81/64 PC 25/19 77/66 C
Osaka 28/22 82/72 C 28/24 82/75 T
Paris 23/15 73/59 Sh 21/14 70/57 Sh
Riyadh 42/28 108/82 S 41/28 106/82 S
Rome 28/15 82/59 S 28/16 82/61 PC
San Francisco 28/14 82/57 S 29/15 84/59 S
Sao Paulo 17/14 63/57 C 22/14 72/57 PC
Seoul 24/22 75/72 R 27/23 81/73 T
Shanghai 37/29 99/84 H 37/28 99/82 H
Singapore 32/26 90/79 T 31/26 88/79 T
Stockholm 22/12 72/54 Sh 21/14 70/57 PC
Sydney 18/8 64/46 F 18/6 64/43 F
Taipei 34/27 93/81 T 33/26 91/79 T
Tel Aviv 29/21 84/70 S 30/22 86/72 S
Tokyo 27/21 81/70 PC 27/22 81/72 C
Toronto 23/17 73/63 T 27/18 81/64 T
Tunis 35/22 95/72 S 35/21 95/70 T
Vienna 28/17 82/63 S 29/18 84/64 H
Warsaw 24/15 75/59 Sh 28/17 82/63 PC
Washington 29/23 84/73 T 30/23 86/73 T
Tuesday Wednesday
C F C F
Meteorology by
AccuWeather.
Weather shown
as expected
at noon on
Tuesday.
STOCK INDEXES
CURRENCIES
COMMODITIES
2012 2013
+60%
+40
+20
0
2012 2013
0%
10
20
2012 2013
+10%
0
10
20
UNITED STATES S&P 500 52-week
1,623.79 +17.51 +22.2%
OIL Nymex light sw. crude 52-week
$97.94 a barrel +1.38 +17.1%
EUROPE DJ Stoxx 50
2,622.62 +20.03 +21.6
GOLD New York
$1,258.60 a tr. oz.+33.50 21.2
JAPAN Nikkei 225
13,852.50 +175.18 +56.1
CORN Chicago
$6.75 a bushel +0.07 2.4
EURO 52-week
1= $1.31 +0.005 +3.7%
YEN
100= $1.00 0.006 20.2
POUND
1= $1.52 +0.001 3.0
Data as of 1700 U.T.C.
Source: Reuters
Graphs: Custom Flow Solutions