PoliticsthisweekApr10th2008FromTheEconomistprinteditionGeneralDavidPetraeus,thecommanderofAmericanforcesinIraq,andRyanCrocker,America'sambassadorinBaghdad,providedCongresswithanupdateontheprogressofthewar.Bothmenemphasisedtheachievementsinreducingviolence,butGeneralPetraeussaidthatthegainswere"fragileandreversible*1.Herecommendedthattrooplevelsbemaintainedataround140,000oncethewithdrawalof30,000troopssenttoIraqina“surge”operationiscompletedinJuly.SeearticleInarenewedflare-upofviolence,atleast73peoplediedinSadrCity,ineasternBaghdad,asAmericanandIraqitroopscontinuedtofightShiamilitias;15Americanswerekilledinthesameperiod.HillaryClinton,JohnMcCainandBarackObamaallgottheirchancetoquestionGeneralPetraeusinSenatecommitteehearings.TheeventwasawelcomedistractionforMrsClintoninparticular,whoearliersackedherchiefcampaignstrategist,MarkPenn,fortalkingprivatelytoColombianofficialsaboutafree-tradedealthatsheopposes.MrPennhasalsocomeinformuchcriticismforhishandlingofMrsClinton'spresidentialbid.Seizingthemoment,GeorgeBushdecidedtosendtheColombianfree-tradepacttoCongressforapproval.ColombiaandtheUnitedStatessignedtheagreementinNovember2006;withtheDemocratsopposed,itspassageisfarfromcertain.SeearticleMichaelBloomberg*sproposalforacongestionchargeinManhattancollapsedwhentheDemocratsdecidednottosupportit.NewYork'smayorwanteddriverstopay$8toenterabusyzoneinManhattanaspartofanefforttoeasecongestionandreducethecity'semissions,buttheplanwasopposedbypoliticiansinNewYork'sotherboroughs.AuthoritiesinTexascarriedoutaraidontheranchofapolygamistreligioussect160milesnorth-westofSanAntonioafterreportsofchildabuseandforcedmarriages.Morethan400childrenand130womenwereremovedandthepremisessearched.Seearticle

Liberty,equality.Fraternity?Kosovomoveditsrecentlydeclaredindependenceforwardwhenitsparliamentadoptedanewconstitution.ThedocumentprotectstherightsofKosovo'sminorities,includingSerbs.Serbiacalledthecharteranillegalact.Vandalsdesecrated148MuslimgravesataFrenchcemeteryforsoldierswhofoughtinthefirstworldwar.Some78,000menfromFrenchcoloniesdiedinthewar,manyfromAlgeriaandTunisia.Neo-NazisdaubedswastikasonMuslimgravesatthesitelastyear.AnewOlympicsportGettyImagesLondon,ParisandSanFranciscosawprotestsagainsttheBeijingOlympicTorchRelaybypro-Tibetandemonstrators.InLondon37peoplewerearrested,theflamehadtobeextinguishedinParis,andSanFranciscochangedtherouteofitsceremony.ChinaresistedcallstocurtailtheglobalrelayandtorethinkplanstosendthetorchthroughTibetitself.SeearticleGettyImagesAsuicide-bombattackatthestartofamarathonraceinSriLankakilled14people,includingthehighwaysministerandsomeofthecountry'sstarathletes.Theattack,blamedontheTamilTigers,alsoinjuredmorethan90people.TherulingjuntainMyanmarannouncedthatareferendumonadraftnewconstitutionwouldbeheldonMay10th.Itpublishedthedraftforthefirsttime,confirmingexpectationsthatitwillentrenchmilitaryruledespiteallowinglimitedmultipartyelectionsin2010.SeearticleFifty-fourBurmesemigrantsdiedaftersuffocatinginalorrysmugglingthemintoThailand.Theyhadbeenpackedintoanairtightcontainerforthejourney.AheadofelectionsonApril10th,Nepalwasscarredbyviolence.Inoneofthemostseriousincidents,sevenMaoistactivistswereshotdeadbysecurityforces.SeearticleHungerpainsInHaiti,ahungrymobtriedtostormthepresidentialpalaceinthecapital,Port-au-Prince,incontinuingprotestsoversoaringfoodprices.UNtroopsfiredrubberbulletsandteargastodispersethem.FrancecalledoffahumanitarianmissiontoCoIombiatosecurethereleaseofIngridBetancourt,aFrench-Colombianpolitician,aftertheFARCrebelswhoareholdingherhostagesaidtheywouldnotallowthedeliveryofemergencymedicalaid.Ecuador'stopfourmilitarycommandersresignedafterPresidentRafaelCorreaaccusedthearmyofaidingtheUnitedStatesinoperationsagainsttheFARC.TheresignationscamehoursafterEcuador'sdefenceministersteppeddownwithoutexplanation.FourmembersofanarmydeathsquadinPeruwereconvictedofthemurderin1992ofninestudentsandaprofessorsuspectedoflinkswithMaoistrebels.TheverdictislikelytoaffectthetrialofAlbertoFujimori,aformerpresident,whoisaccusedofauthorisingthedeathsquad.PresidentialambitionTwelvedaysafterZimbabwe'spresidentialelection,resultshadyettobeofficiallydeclared,thoughmostindependentanalystspresumedthatPresidentRobertMugabehadlosttoMorganTsvangiraiandthattheincumbent'shardlinesupportersweretryingtoenforcearun-off.AfterregionalleadersfailedtopersuadeMrMugabetostepdown,ZambiacalledanemergencymeetingoftheSouthernAfricanDevelopmentCommunity,whichitchairs.SeearticleViolenceeruptedinKenyaagainaftertalksbrokedownbetweenPresidentMwaiKibakiandtheoppositionleader,RailaOdinga,overthedistributionofministriesinapower-sharinggovernment.MrOdingahadrejectedtheresultsofanelectioninDecemberthatmostobserversthoughtwasriggedinfavouroftheincumbent,MrKibaki.SeearticleTensionbetweenIsraelandthePalestinianauthoritiesintheGazaStriproseaftertwoPalestinianmilitantsattackedtheNahalOzbordercrossing,wherefueliscarriedfromIsraelintothestrip,killingtwoIsraelis.TwoPalestinianfightersandatleasttwoPalestiniancivilianswerekilledbyIsraelicounter-strikes.Reuters

IndiahostedthefirstIndia-Africasummit,with14Africanleadersattending.TheeventreflectedIndia'sgrowingcommercialinterestinAfrica;itwasalsodeemedanattempttocounterthegrowinginfluenceofChinainthecontinent.SeearticleBusinessthisweekApr10th2008FromTheEconomistprinteditionMasaakiShirakawawasapprovedastheBankofJapan'snewgovernor.Astand-offbetweenthecountry'sgovernmentandoppositionhadleftthepositionvacantsinceToshihikoFukui*sretirementonMarch19th.However,theoppositionstillblockedthenominationofHiroshiWatanabeasoneofhisdeputies.Initsmonthlyreportthebankgavewarningthattherisingcostsofenergyandrawmaterials,coupledwiththeglobalcreditcrisis,wouldcauseJapan'seconomytoslow.ThedatesforthetestflightandfirstdeliveryofBoeing's787Dreamlinerpassengerjetwerepushedbackbyaroundsixmonths,thethirdsuchdelaytotheprogrammebecauseofproductionmishaps.Thefirstdeliveryisnowdueinthethirdquarterof2009.SomethingcompellingAmericanAirlinescancelledthousandsofflightsoverseveraldaystocarryoutsafetyinspections,causingfurtherdisruptiontopassengers.AirlinesintheUnitedStatesareboundtocomplywithascheduleofgovernmentinspections.LastmonththeFederalAviationAdministrationsaiditwasconsideringfiningSouthwestAirlines$10.2mforflying46jetsthathadmissedtheirallottedcheck-uptimes.NovartisstruckadealthatwilleventuallygiveitcontrolofAlcon,theworld'sbiggesteye-carecompany.Inanall-SwisstransactionNovartis,adrugcompany,ispayingNestle,Alcon'sowner,$11billionfora25%stakewithanoptiontobuyNestle'sremaining52%holdingfor$28billionatalaterdate.SeearticleWashingtonMutualboosteditscapitalpositionbyraising$7billioninasaleofnewsharestoinvestorsledbyTPG,aprivate-equityfirm.America'ssixth-biggestbank,whichhasitsheadquartersinSeattleandisoneofthecountry'sleadingmortgagelenders,isreininginitshome-financingoperationsandshedding3,000employees.SeearticleItwasabusyweekforTPG.Thefirmalsoagreedtotakea50%stakeinSIAInternational,aRussiandrugs-distributionfirm,for$800m,thebiggest-everprivate-equityinvestmentinRussia.AcourtruledthatBritain'sSeriousFraudOfficehadactedunlawfullywhenitdroppedaninvestigationintoallegedbriberyinanarmsdealinvolvingBAESystemsandSaudiArabia.TheSFO'sdecisioninDecember2006toenditsinquiriesiswidelybelievedtobetheresultofpoliticalpressure.GettingtoughAfterMicrosoftthreatenedtomakeahostilebidforYahoo!ifthecompanydidn'tacceptitsfriendlyoffer,marketsponderedreportsthattheinternet-searchenginewasabouttoteamupwithAOL,andthatNewsCorpwouldjoinMicrosoft'sbid.LachlanMurdoch'sattempttobuyoutAustralia'sConsolidatedMediaHoldingscollapsedafterdisagreementsaboutapriceforthedealcouldnotberesolved.HearingsbeganinGermany'sbiggestshareholderlawsuit.Some16,000peoplearesuingDeutscheTelekomforallegedlyovervaluingassetsinashareissuein2000.Thevalueoftheshareshassincefallenbyaround80%andthesuitseekseuro80m($125m)indamages.DeutscheTelekomsettledasimilarcaseinAmericain2005,whichwouldhavegonebeforeajury.ThedisputeinGermanywillbedecidedbyajudge.SeearticlePartylikeit's1992FearsaboutnegativeequityreturnedtohauntBritishhomeowners,withoneindexreportingthathousepricesfellby2.5%inMarchcomparedwithFebruary,thesharpestsuchdeclinefor16years.Seearticle

TherewasanotherdropinAmerica'snon-farmpayrolls.Around80,000jobswereeliminatedinMarchUSunemploymentrateTOC\o"1-5"\h\zcomparedwiththepreviousmonth.The 、USunemploymentrateunemploymentrateroseto5.1%.Seearticle $， ji%。Eurotunnelreporteditsfirstannualprofitsinceitwas ，formedin1986.Lastyeartheoperatorofthetunnel 4.0linkingBritainandFrance,whichopenedin1994, “ ”rejiggeditsbusiness,changeditsofficialnameto 加…di血u,stnuaGroupeEurotunnel,andrestructureditsmassivedebtovertheoppositionofsomebondholders.Itmadeaprofitin2007ofeuroAm($1.6m).China'scurrencytradedbelowsevenyuantothedollarforthefirsttimesince1994.China'scentralbankcontrolsthemarketforthecurrency.Itabandonedapegagainstthegreenbackin2005andhasallowedtheyuantoappreciaterapidlyoverthepastfewmonthsaspartofagovernmentefforttodampenrisinginflation.HankPaulson,America'streasurysecretary,recentlyvisitedBeijingwherehewelcomedthecurrency'sappreciationandsaidhehopeditwouldcontinue.Chinasigneditsfirstfree-tradeagreementwithadevelopedcountry:NewZealand.KAL'scartoonApr10th2008FromTheEconomistprinteditionIllustrationbyKevinKallaugher

WITHNOENDWHICHAHEREALLVGREHAPESDODG1MGPULLETS.WITHNOENDWHICHAHEREALLVGREHAPESDODG1MGPULLETS.ANPTHISISAMARKEPUAPRWEM匕NTFROMLIFEPREVIOUS「MAKIMGPROGRESSINIRAQTOPAVISLIKE：TheworldeconomyThegreatAmericanslowdownApr10th2008FromTheEconomistprinteditionTherecessionmaynotbeassevereasmanyfear,buttherecoverycouldtakelonger—andthatisdangerousGetarticlebackaroundAMERICANSareunaccustomedtorecessions,particularlyonesthatinvolveshoppingless.Duringthepastquarter-century,theworld'smostpowerfuleconomyhassufferedonlytwoofficialdownturns,in1990-91and2001.Bothwereshortandshallow.In2001consumerspendingbarelyskippedabeat;adecadeearlieritfell,butonlybriefly.Buoyedbyrisingassetpricesandfinancialinnovationsthatallowedevermorepeopletotapevermoredebt,thecollectiveAmericanwallethasnotsnappedshutinalmosttwodecades.Thatmaybeabouttochange.Evidenceismountingthattheeconomyhasslippedintorecession—andthistimeconsumerweaknessistothefore(seearticle).ThedoughtyAmericanshopperisbeingpummelledbyfourthings:thehousingbust,thecreditcrunch,higherfuelandfoodcostsand,mostrecently,aweakeninglabourmarket.Theunemploymentrateroseto5.1%inMarch,whiletheprivatesectorlostjobsforthefourthmonthinarow.Feelingpoorerandwithfewerpeoplepreparedtolendthemmoney,consumersarecuttingback:witnesstheslumpincarsales.Andseeingthatconsumerspendingaccountsfor70%ofAmericandemand,thathurts,especiallywhenitiscoupledwithacollapseintheoncemightyconstructionindustry.TheIMFnowofficiallypredictsanAmericanrecessionin2008;manyattheFederalReservethinkoutputiscontracting.Shallowbutlengthy:youcoulddoalotworseTherearetwobigquestionsaboutthisdownturnforAmericaandtheworld:howlong?Andhowdeep?Onthesecondcount,thereisroomforguardedoptimism:althoughAmericanrecessionshaveusuallysenttheworldeconomyintoafunk,thistimetheslowdownneednotbesosevere—especiallyfortheemergingworld.Theeconomictestsinsteadmaycomefromthelengthofthisdownturn:anAmericathatstayssluggishforseveralyearscouldcauseallsortsofproblems.Thatisnottoimplythatasevereglobalslowdownisoutofthequestion.TheIMFreckonsthatthereisa25%chanceoftheworldeconomygrowingbylessthan3%in2008and2009,theequivalentofrecession,initsview.Theoriginsofthiscrisislieinthebiggestassetbubbleinhistory;financialmarketshavealreadysufferedarguablytheirbiggestshockfor80years;andAmericaisnottheonlydevelopedeconomysuffering(Britain*shousingmarket,forinstance,isshowingthesamesymptomsasAmerica's—seearticle).Butsofaratleastthereislittleevidencethattheworldeconomyisfallingoffacliff.ThepaceofjoblossesinAmericahasbeenmildcomparedwithpreviousdownturns,andthereareacoupleofreasonstosupposeitwillstaythatway.ThefirstistheactivismofAmericanpolicymakers.Congressstartedthrowingmoneyattheproblemearly,andasecondfiscalstimulusisalreadybeingdiscussed(alongsideabail-outforthehousingmarket).TheFedhasslashedinterestrates,promisedmorecutsiftheeconomystaysweakand-perhapsmostimportant—sharplyreducedtheoddsoffinancial-marketcatastrophebyextendingitssafetynettoinvestmentbanks.Thesecondisthechangingstructureoftheworldeconomy.ThedynamismandresilienceofemergingmarketsmeanthatAmericadoesnotmatterasmuchasitoncedid.TheIMFexpectsglobalgrowthtofallfrom4.9%in2007to3.7%thisyear—hardlycatastrophic.Moreover,theseforeignerscannowdoabittocushiontheblowforAmericans:alreadyglobaldemand,coupledwithaweakdollar,isboostingAmericanexports.Meanwhile,somelossesfromAmerica'shousingbusthavebeenborneabroad,althoughnotwithoutpain.Withtheseprops,Americacanavoidadeepslump,butdon'texpectavigorousrecovery.Spendingwillbesupportedbytaxrebatesinthesecondhalfoftheyear,butthehangoverfromthehousingbustwilllingermuchlonger.Judgingbytheexperienceofotherrichcountriesthathavesufferedfinancialcrisesspawnedbyhousingbusts,suchasSwedenandNorwayintheearly1990s,weakbalancesheetswillweighonconsumers'spendingforyearsratherthanmonths.The2008recessionmaybemild,butthe2009recoverywillbefeeble.BewaretheslitheringsnailIftheworldeconomy'sbiggestproblemturnsouttobeAmericaremainingsnail-likeforlongerthanmostpeopleexpect,manywillbreatheasighofrelief.Giventhescaleofthefinancialmess,itcouldbealotworse.Youcanevenarguethatafterfiveyearsofbreakneckgrowth,amoresedateglobalexpansionwouldbenobadthing:itwoulddampeninflationarypressuresintheemergingworld,andweakerdomesticdemandshouldshrinkAmerica'sgapingexternaldeficit—alreadydownfromabove6%ofGDPtobelow5%.Butthatisaboutasfarasoptimismcantakeyou.Themainfearisthattherestoftheworldproveslessresilientthannowseemslikely:commodityexporters,say,mayrelyonAmericandemandlessthantheydid,butarehardlycutofffromit.Theweakdollaralsocausesproblems.ImportingAmerica'sloosemonetarypolicywillbecomehardertosustainforcountries,suchastheGulfstates,thatpegtheircurrenciestothegreenback.Theywillneedtolettheirexchangeratesrise.Politicstoocandoplentyofdamage.AsluggishAmericanextyearwillbeahardinheritanceforthenextpresident.Withthebudgetdeficitrising,bigdomesticreforms,suchasexpandinghealth-carecoverage,willbecomemoredifficult;withafragileeconomy,theDemocrats,iftheygetin,mayhavetorethinktheirplantorollbackGeorgeBush'staxcuts.Anddonotforgetpopulismandprotectionism.AlreadyeightoutoftenAmericanssaytheircountryisonthewrongtrack.Aprotractedmalaisewillspawnanangrysearchforscapegoats.EventhoughfreetradeishelpingsaveAmericansfromaworsedownturn,MrBushisstrugglingtogetatradedealwithColombiathroughCongress(seearticle):heavenhelptheDoharound.Meanwhile,themomentumtore-regulatefinancialmarketsandpunishtheoilindustry,credit-cardfirmsorindeedanyothermalefactorsofgreatwealthwillgrow.ThegreatAmericanslowdownmaybelesscalamitousthanmanypeoplefear;butitisfraughtwithdangers.EuropeansecurityandRussiaThinkpipesnotrocketsApr10th2008FromTheEconomistprinteditionTheEuropeanUnionshouldworryaboutgas,notjustmissiledefences川ustrationbyDavidSimondsBELIEVEthespin,andAmericaanditsEuropeanalliesaredoingagreatjobinbolsteringthefuturesecurityofaEuropewholeandfree.TheNATOsummitinBucharestgavean(undated)promiseoffuturemembershiptoUkraineandGeorgiaandendorsedAmerica'splansforalimitedmissile-defencesysteminPolandandtheCzechRepublic.Realityisratherdifferent.GeorgeBush'seffortstoburnishhispresidentiallegacyledtoavenomousrow.SomeNATOmembersinoldEuropethoughttheywerebeingrailroadedbyAmericaintohastyexpansion(seearticle).SomeineasternEuropeworriedthataRussia-friendlycampcentredonGermanywastakingshapeinsidethealliance.Meanwhile,thechirpytoneofalatermeetinginSochibetweenMrBushandVladimirPutinbeliedalackofsubstance.HelpforthosewhohelpthemselvesButtherealworryforEuropeisadifferentone.ItgetsaquarterofitsgasfromRussiaandtheproportionissettorisesharply.TheKremlinusesitsmonopolyofeast-westgaspipelines,andoffersoflucrativebilateralgasdeals,tointerfereinEurope'senergybusiness.ItreliesonfriendslikeGermanytoblockeffortstoliberaliseEuropeanmarketsanddiversifysupply.RussiaisalsopushingaheadwithSouthStream,a$15billionpipelinetobringgasacrosstheBlackSeatocentralEuropeviatheBalkans.ThreeEuropeanUnionmembers,Bulgaria,HungaryandItaly,havesignedup,andAustriaisinterested.ThisweakensthechancesofanEU-backedalternative,Nabucco,alreadystymiedbylackofgas,partlybecauseofRussia*sCaspianarm-twistingandalsobecausepoliticsprecludesusingsuppliesfromIran.Theenergy-securityoutlookisbleak,buttheEUcouldhelpitselfinthreeways.First,bypushingharderfornewpipelinesthatweakenRussia'sgripongasfromtheeast.EffortstoreviveNabuccoshouldcontinue.ButpoliticalsupportshouldalsobegarneredforWhiteStream,aningenioussmaller-borepipelinethataimstobringCaspiangasacrosstheBlackSeatoEurope,bypassingawkwardTurkey.SerioustalksonthatwouldconcentratemindsonRussia'stroublingmonopoly.TheWestalsoalreadyhasaccesstotwinoilandgaspipelinesfromtheCaspiantoTurkey.Second,theEUneedstodriveaharderbargainwithRussiaonthegasitdoesbuy.ItspopulationismorethanthreetimesRussia's;itis13timesricherbyGDP.AnditisafterallinRussia'sinteresttootomakesurethatCentralAsia'sgasissoldtoEurope(ie,mostlyviaRussia)notdirectlytoChina.EuropeisalsothemostplausiblemarketforthebignewgasfieldRussiaplanstodevelopintheArctic.Itsill-run,debt-soakedgasindustryneedsWesternexpertiseandcashtomodernise.ButEuropealsoneedstoinsistonmoreliberalisationandtransparencyinthegasindustry.AdeepandliquidmarketwouldmakeitharderfortheKremlintomanipulatesupply.Gazprom—thetradingnameofthegasdivisionofKremlin,Inc—shouldbeabletoinvestinEuropeonlyifitobeystherules.TheEUshouldtreatGazpromwiththesametoughnessthatithasshowntowardsMicrosoft,obligingittopublishdetailsofitscontractsandopenthebooksofshadowyintermediarycompaniessuchasRosUkrEnergo.Theseoftenseemtoexistsolelytosiphonoffexportrevenues,forthebenefitofhiddenowners.AndGazpromneedstoseparateitstransmission,distributionandstorageassetstoallowfullthird-partyaccess—astheEUshouldhaveforceditsowncompaniestodo.TheintricateeconomicsofthegasbusinessmayseemlessexcitingthantheStarWarstechnologyofmissiledefence.ButforEurope'sunityandsecurity,theymattermore.ChinaandMyanmarKeepingtheflamealightApr10th2008FromTheEconomistprinteditionTwowaystorepairChina'simage:endthetorchrelayandtakealeadoverMyanmarGettyImagesGetarticlebackaroundWEREshootingoneselfinthefootanOlympicevent,Chinawouldsurelybewellplacedforagold.TheBeijing2008OlympicTorchRelay,takingtheflamearoundtheworldbeforethegamesbegininAugust,wasalwaysarisk.Ofcoursetheflamewoulddrawprotesterslikemoths.ButthesuppressionofriotsandprotestsinTibethasensuredthetorch'sprogresshasgraduatedfromminordiplomaticembarrassmenttofull-scalepublic-relationsdisaster(seearticle).Anexerciseintendedtoflauntthenew,outward-lookingandconfidentChinahasdisplayeditsdarkside:nervous,repressive,pricklyandstubborn.Thatstubbornnessmayruleouttheobviousremedy:callingthewholefarceoffbeforesomeoneisbadlyhurt.AtleasttheInternationalOlympicCommitteeshouldhavenothingmoretodowithit.ProteststhisweekinLondon,ParisandSanFranciscowereill-temperedenough.ThepassagethroughDelhionApril17thcouldbeuglier.Indiaishometosome100,000Tibetans.Theonlystoponthetorch'sworldtoursuretobetrouble-freeisPyongyang.AsforitsproposedprocessionthroughTibetinJune,itishardtoimagineamoreprovocativeorinsensitivegesture.ToaccuseChina'scriticsof“politicising”asportingeventisnonsense.Whathastherelaytodowithsport?Itisnotsometimewornpracticeintegraltothegames.Rather,theideaofarelayfromGreecetotheOlympicvenuewasrevivedbytheNazisforthe1936BerlinOlympics,whichishardlyaprecedentChinawantstoadvertise.Thefirst“global"relayonlytookplaceforthemostrecentOlympics,inAthensin2004.Butthatwasnotsuchacircus.China*spridemayprecludeanyconcession,howeverface-saving,onTibet,oronhuman-rightsabusesingeneral.Butitisalsofacingcriticismforitsforeignpolicy—itslinkswiththegovernmentsofSudanandMyanmarinparticular.Here,intheory,itcandosomethingtoshowthatitisindeedaresponsibleinternationalustakeholdern,withdiplomaticmaturityaswellaseconomicclout.TakeMyanmar.Afterthebloodyquellingofthe"saffronrevolutionHlastSeptember,therulingjuntathrewafewsopstointernationalopinion.ItacceptedvisitsfromaUnitedNationsenvoy,openedtalkswiththedetainedoppositionleader,AungSanSuuKyi,andgaveatimetableforapoliticaltransition.Chinadeservessomecreditforforcingthejunta'shand.Myanmar'sgeneralsarenobody'spuppets.ButChina,withitsbigcommercialinterestsinthecountry,anditssupportintheUNSecurityCouncil,isnowthejunta'sbestfriend.Itistimetousethatpositionagain.Confidentthattheoutsideworld'sfocusontheirmisdeedshasshiftedelsewhere,thegeneralshavestalledondialoguebothwiththeiropponentsathomeandtheUN'senvoy.Theplightoftheircountryremainsdesperate(seearticle).Thepolitical"process"hasdegeneratedintoadrivetoimposeaconstitutionentrenchingmilitaryrule.AreferendumonthissolutionwillbeheldonMay10thinaclimateofviciousintimidation.MembersoftheSecurityCouncilaremullinganewstatement,callingforsomeoftheminimumreformsneededforacrediblevote—suchasthereleaseofoppositionleaders,includingMissSuuKyi.ThefirstthingChinacandoistoallowthestatementtobeissuedinthenameofaunitedoutsideworld.Morethanthat,Chinacouldhelpresolvethesteriledebatethathasragedfortwodecadesover“engagement”orMisolation^^.Isolationhasneverworked,becauseChina,IndiaandSouth-EastAsiancountriesseetoomuchcommercialandstrategicbenefitinlinkswiththejunta.Butnorhas“engagement”，sinceWesterncountrieshaveimposedsanctionsofvaryingseverity,andthejuntahaslittleinterestinengaginganyway.NobodywinsgoldforsittingonafenceDespitethis,thereisabroadconsensusabouttheneedforreforminMyanmar.Withanti-ChinesefeelingmountinginMyanmar,itisnotinChina'sintereststobeperceivedasthepropthatalwaysholdsupaloathedregime.Itcouldtaketheinitiativeinformingacontactgrouptoengagethejuntaintalksoneconomicco-operationandpoliticalreform.EvenifitexcludedEuropeandAmerica,suchagroup,ofChina,India,someSouth-EastAsiancountriesandJapan,couldhelpshowthegeneralsthattheycannotforeversurviveinthecracksofothercountries'disagreements.AnditcouldhelpshowthatChinaisnotalways,unequivocally,onthesideofthethugs.IndianfinancialreformWhyMrRajanisrightApr10th2008FromTheEconomistprinteditionIndia'sfinancialsystemprizesstabilityovervigour.11achievesneitherReutersGetarticlebackaroundININDIA,financialinstrumentswereoncethingsofbeauty.Peoplewhohadnoaccesstobanks,ornofaithinthem,investedtheirsavingsingoldnecklaces,earringsorwaist-chainsinstead.NowIndia'sprosperousclassesfavoursemi-preciousstonesfortheirjewelleryandunglitterybankaccounts,sharesandpropertyfortheirinvestments.Thisisprogress.ButsomeIndiansaversmightbefeelingnostalgicfortheshinyinvestmentsofthepast.Thecountry'swholesale-priceinflationrateisata40-monthhighof7%anditsstockmarkethasfallenbyaquarterfromitsJanuarypeak(seearticle).ThesubprimecrisisinAmericaandhighcommoditypricesathomehavedeepenedmanypeople'ssuspicionthatfinancialmarketsaremerelyglorifiedcasinosmanipulatedbysp