Is Thanh the man?

EARLIER this month Vietnam’s courts handed out long jail sentences to 14 young democracy activists and bloggers accused, on the flimsiest of evidence, of subverting the state. Even by the sorry standards of the country’s Communist Party of Vietnam (CPV) rulers this marked a new low of pitiless, disproportionate repression. Their main transgression seems to have been nothing more belligerent than to attend a training session in Bangkok run by a banned political party.
The CPV might have meant the show trial as a sign of political strength, to intimidate any opposition, but most Vietnamese read the event more cynically—as an act of desperation by an increasingly paranoid party. Despite the economic progress brought by a quarter-century of reform and relative openness, the CPV risks losing the moral authority it needs to rule.
Since the press is utterly under the government’s control, the crackdown on dissent is largely directed at the internet. At one point Vietnam was estimated to have at least 2m blogs—mostly chatting about innocuous “lifestyle” themes, but with a significant number covering sensitive social, economic and political issues in ways the party did not like. The crackdown has increased in ferocity over the past two years, apparently in direct proportion to the country’s mounting litany of problems. In terms of internet freedom, Vietnam now ranks near the bottom of global league tables, just above China and Iran. In a region of fast-changing reform, notably in Myanmar, Vietnam more than ever looks like a political dinosaur—and one heading in the wrong direction, too.
The main reason for the CPV’s defensiveness is its mismanagement of the economy. Only five years ago the country was lauded as the new Asian tiger, notching up record growth rates. Yet now the old structural problems of a largely unreformed socialist economic system have caught up with it—producing, in quick succession, rising inflation, a falling currency, deeply indebted banks and tumbling economic growth, down to a modest 5% or so last year. Everyone, even the Communist leaders, agrees that the main culprits are the state-owned enterprises (SOEs) through which the party tries to manage the economy in traditional socialist style. They account for about 40% of the nation’s output yet are poorly managed, wasteful and uncompetitive. In 2011 one of the biggest SOEs, the shipbuilder Vinashin, nearly collapsed altogether.
More damagingly, however, the SOEs’ operations appear to be sullied by corruption, and that has undermined the authority of a party founded by the ascetic Ho Chi Minh. The senior managers are all political appointees. Often the SOEs seem to be run mainly for the benefit of party members, many of whom are now very rich. Last year was a terrible one for the reputation of SOEs and the CPV alike, with several instances of executives fleeing abroad or going to jail. Corruption has long been systemic. A report by the Vietnam Chamber of Commerce and Industry last year found that 50% of businessmen admitted to bribing officials in order to win contracts. The real proportion is probably higher.
Just as there has been a lot of talk about how to reform the SOEs, so there has been plenty of discussion about how to tackle corruption—but little action. At last, however, the party has acted, but in typical fashion. Rather than force resignations or sackings, which would undermine the party’s claims to infallibility, it has sent for one of its own to sort the mess out.
The man riding to the rescue is Nguyen Ba Thanh, the 59-year-old party boss of Danang, the country’s third-largest city. He has just been appointed head of a powerful new party body, the Central Internal Affairs Commission, with a brief to reduce graft. Mr Thanh will arrive in Hanoi with a reputation for charisma and blunt, plain-speaking effectiveness. He carries the hopes of reformers that he can reproduce this at the national level.
He will have his work cut out. He is walking straight into a bitter power struggle between, on the one hand, the prime minister, Nguyen Tan Dung, and, on the other, the president, Truong Tan Sang, along with the CPV’s general-secretary, Nguyen Phu Trong. Mr Dung’s reputation has been tarnished by the fiasco at Vinashin and other scandals; he was said to be close to several Vinashin executives and also to a banker, Nguyen Duc Kien, who was arrested last August for alleged “economic violations”. Mr Dung only narrowly held on to his job. The arrival of Mr Thanh appears intended to clip his wings yet further. Mr Dung is counter-attacking, however. A government agency issued an unusual report this month attacking mismanagement and corruption in Danang on Mr Thanh’s watch.
For such ructions at the top to become public is another symptom of strains within the political system in Vietnam. Meanwhile, public anger and frustration with the party are growing, though not as yet to revolutionary levels. Nonetheless, confrontations with authority, for instance over government land grabs, may well now turn violent. In all likelihood Mr Thanh’s brief will allow him only to tinker with the current system. More profound change will have to wait, or come against the party’s wishes.

China's "String Of Pearls" Strategy To Secure The Ports Of South Asia

By Vanessa Dougnac LE TEMPS/Worldcrunch

CHITTAGONG – In the port of Chittagong, containers pile up like colorful cubes of sugar. Dozens of ships scurry down the estuary of the Karnaphuli, the river that winds around the economic capital of Bangladesh to finally stream down into the Bay of Bengal.
The port is bustling. The newly built mooring container terminal (NCT) is beautiful, with an extension of five berths. The company was built by the China Harbour company – a symbol of China’s multiplying contributions to the development of Bangladesh. A little further upstream, a 950 meter-long four-way bridge was built by the China Major company. Towering over shantytowns and wooden fishing boats, the majestic structure is Chittagong’s symbol of modernity.
Nowadays in Bangladesh, it’s hard to miss all the Chinese constructions. In October, there was yet another Chinese delegation signing deals and offering subsidized loans for a water treatment facility, a private power plant and an international airport in the fishing port of Cox’s Bazar.
But mostly, China is building a spectacular deep-sea harbor in the island of Sonadia for an estimated cost of $5 billion. There is also a tunnel under the Chittagong River, a China-Bangladesh highway via Burma (Myanmar), and the project of a new industrial park.
“China is supporting us through their big projects,” says Raisul Haq Bahar, the Chittagong Daily Star’s editor-in-chief. “They have the know-how, the people, the money and the technological investments.” Amir Khasru Mahmud Chowdhury, the former minister of commerce and regional head of the BNP (Bangladesh National Party) believes that “the Chinese are developing a real strategy, anticipating on the next 30 years. They are selling their country, their products and services. While the westerners are busy attending fancy diner parties in Dacca, the Chinese are working. They will soon be the world’s first economy and a country like Bangladesh cannot ignore that.”
Fighting for regional domination
Today, the Chinese focus on the strategic sector of transportation can be seen in Bangladesh, Nepal, Bhutan, Burma, Sri Lanka and Pakistan. All of these countries surround… India. In a region where it has always been very influential, the Indian government was quick to suspect the Chinese expansion of hiding an “encirclement” strategy. The two Asian giants are locked in a struggle for regional domination. “In the way it deals with China, India has aligned itself with the U.S.,” says Amir Khasru Mahmud Chowdhury.
The “small” nations of the Indian subcontinent have always been wary of their Indian big brother, whose domination they resent. “Indians don’t bring us any interesting deals,” says this former member of the Bangladeshi government. The Chinese alternative seems more appealing. So much so that India is thinking about changing its strategy to become more pragmatic. Salman Khurshid, the Indian minister of foreign affairs admitted this recently: “New Delhi must accept the reality of the Chinese presence in many sectors previously considered as India’s exclusive domain.”
Chinese investments are visibly geared toward improving maritime transport infrastructures. In Chittagong, China has big plans: “Our goal is to replace the port of Singapore!” says lieutenant-colonel Moazzem Hossain, head of security at the Chittagong port authority. This summer, he went to the ports of Le Havre (France) and Hamburg (Germany) to take notes. “They are very clean and organized,” he admits, “but our port here in Chittagong is getting more modern by the day and will be the next reference in South Asia.” Ninety percent of Bangladesh’s import-export passes through here, mostly textile bound for Europe and the U.S.
China’s interest for harbor projects stretches to Sittwe, in Burma, where there is the project of a gas pipeline between the port and China. There is also the brand new Hambantota port in Sri Lanka, the construction of which started during the civil war (1983-2009), when Beijing was providing weapons to Colombo against the Tamil separatists.
In the Maldives, the Chinese projects didn’t pan out but a Chinese embassy was built in the capital, Male, in 2011. Pakistan, on the other hand, has commissioned a Chinese company for the construction of its new port in Gwadar, on the Arabian Sea. Being present in every port has a purpose: it’s the famous “string of pearls” strategy, which consists in China getting exemption from port of call taxes and securing trading routes for Middle Eastern oil while asserting its commercial influence. For now, China’s involvement in Bangladesh is undeniably a positive thing, as it is a symbol of dynamic development.

Read the article in the original language.
Photo by - Stéphane M Grueso
All rights reserved ©Worldcrunch - in partnership with LE TEMPS

Meet China's Ever "Savvy" Consumer, Circa 2020 - She May Rule The World

By Zhang Bin ECONOMIC OBSERVER/Worldcrunch

The target year is 2020, and the subject on the minds of many world economists: the Chinese consumer. 
In a report published last month, “Consuming China: How to get ready for the next stage,” McKinsey & Company predict that consumption will replace investment as the driving force of China’s GDP growth. Meanwhile, Dong Tao, Asia chief economist for Credit Suisse, boldly predicted that in 2020 Chinese consumption will overtake that of the United States and become the world's largest consumer market. 
“Meet the Chinese consumers of 2020” another recent McKinsey study described the profiles to expect of China’s mainstream consumers. 
The most "shrewd" consumers
Chinese shoppers are famous for their pragmatic consumer approach, which will not change even as their revenues increase. They often set a budget before buying and evaluate the usefulness of goods. Only when a potential Chinese buyer is clear that a product is worth the money do they start looking for the most cost-effective deal.
The McKinsey report shows that this “savvy” Chinese shopping style, taking the trouble to carry out pre-purchase research before buying, won’t change in the coming decade. And this is particularly obvious while price comparisons are becoming more and more accessible with Internet.
Changing spending patterns, aspirational temptations
Just like their counterparts in the developed countries, the Chinese will change their spending habits from pursuing solely the necessities to becoming mature consumers who are more demanding about goods and services. For example, the emotional factors such as whether or not the commodity can reflect the personality of the buyer will greatly influence their purchase decisions. This is because as income increases the personal expression and self-awareness of consumers will grow continuously. This not only applies to commodities such as cars or personal care products, but also to mass merchandise such as milk or detergent.
As a consequence, niche brands are likely to become more popular in tomorrow's China. So far, general public brands have been very successful in China. This is partly because when consumers were buying their first refrigerator, first car or first phone of their lives, they had little experience or guidance about a good’s quality or safety apart from the brand and its reputation. But as Chinese shoppers become more experienced buyers, they’ll gradually gain that sense of security that prompts people to choose niche brands. Besides, this will also become a way of "trading up" to reflect their personality.
About the loyalty to brands
Though Chinese consumers adore branded goods, their fidelity to a certain brand is much lower than that of their Western counterparts.  They generally prefer to choose from several of their favorite marks.
What this implies is that as the Chinese become richer, the young and affluent class will grow more loyal to the brands they love. On the other hand, there will also be a substantial growth of brands that Chinese shoppers can choose from so the large consumer goods companies will face greater competition and have to adapt to this trend.
It’s only in the last ten years that China has started to have modern retail channels. Shopping is not just a necessity but also a recreational activity for many households. This is particularly true for migrant workers or the consumers in smaller provincial cities. But the entertainment value of shopping malls will decrease as the recreational industry and personal consumption patterns develop.
For instance, in 2020 e-commerce will account for 15% of China’s retail sales. Certain categories of consumer electronic goods will contribute up to 40 % of these sales while the e-commerce in daily necessities should grow from 1% today to about 10%.
What does China need to do now?
It’s still another eight years before China technically turns into a consumption-led economy. So what does it lack most on its way to this transformation? The answer is a system in which vigorous laws, regulations and market governance are set up to encourage spending. 
In the American, Japanese or European markets, from buying water to whatever is sold in markets such as food or shoes, consumers are much more protected from buying fake goods because of vigorous governmental inspections. Anyone committing fraud will face a severe penalty and can lead to the ruin of a company. These strict consumer protection systems result in the safest consuming markets in the developed world. 
Needed: a sound consumer protection system
In contrast, Chinese markets are still in chaos. A terrifying example is that even after the revelation of the scandal of children being poisoned with melamine-tainted infant milk, similar vicious incidents were discovered in 2009 and again recently in Gansu, Chinghai and Jilin provinces where the melamine dose exceeded the allowed maximum by 500 times.
The original poisoning caused the death of several toddlers while affecting tens of thousands of the others in 2008. At the same time, endless scandals involving counterfeit goods such as the oil recycled from garbage, adulterated drugs and liquors continued to be disclosed. 
While it is the “World’s factory”, alas, China is far from producing its own “world-class brands” for its domestic consumers. To improve such an adverse market and give birth to a healthy consumption-led economy, China has a long way to go in reforming its consumer protection system.  
Quality control is the typical characteristic of a consumer society. China hasn’t yet become a consumer society. Consumers haven’t been taken seriously so its businesses don’t grasp the notion of brands. They don’t yet know how to manage and use brands properly. China's way of getting involved in globalization has been by providing the grunt labor.
Thus, what China is most lacking in the transitional period over the next few years is neither capital, nor techniques, but vigorous systems and dependable laws. 
Another key to lead China into a bona fide consumer economy is the safeguard of a quicker and more stable growth of people’s real revenue to lay the foundation for spending power.
At the 18^th Congress of the Chinese Communist Party, the government set the goal of doubling China’s gross domestic product (GDP) as well as the per capita income of urban and rural residents by 2020. This is the first time the Chinese Communist Party has concretely mentioned the target of doubling people’s income.
To accomplish the goal, the authorities have to find the entry point of a sustained breakthrough in reforming income distribution, such as the introduction of an inheritance tax. Even if the starting point is as low as, say, 10%, it will still play a role. For the rich, this might encourage them to consider anticipating consumption or transfering their assets. All of this can to a certain extent stimulate spending. As for the value-added tax, even if it’s revised down by a symbolic 1%, it could still relieve the pressure on businesses, increases people’s revenue and promote consumption.
The government should widen its policies for stimulating consumption, and explore appropriate measures such as tax exemptions, tax rebates, and interest subsidies. For example, goods such as automobiles and cosmetics which were once considered as luxury items, and therefore subject to a consumption tax, have become basic consumer goods. The consumption tax should either undergo a gradual reduction or simply be abolished.
As China enters a middle and late industrialization period, and a peak of urbanization, services-led consumption in the sectors of housekeeping and elderly care should be included in government policy to promote the Chinese economy. Not only will this help China’s economic growth, but also improve people’s well-being.

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Photo by - Michael Vito
All rights reserved ©Worldcrunch - in partnership with ECONOMIC OBSERVER

News World news Jamaica British girl shot dead in Jamaica was 'accidental victim of feud'

Imani Green, 8, was on holiday with family when she was hit in the head by a bullet while playing in a shop

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• Nick Davis in Duncans and Sam Jones
• The Guardian, Sunday 13 January 2013 20.34 GMT

Imani Green, from Balham, south London, was shot dead in a cafe in Duncans, Jamaica. Photograph: Mitchum Brown/Handout

An eight-year-old British girl who was shot dead while visiting relatives in a quiet Jamaican town is thought to have been the accidental victim of a violent local feud.
Imani Green, from Balham, south London, was playing with her cousins in a shop in the north coast town of Duncans on Friday night when a gunman burst in and opened fire.
Imani was hit twice – once in the head – and died on the way to hospital. Three people injured in the shooting were also taken to hospital and are thought to be in a stable condition.
Witnesses said an unfamiliar car had pulled up near the general store at about 8.30pm. Seconds later, a masked man walked up to the shop and began shooting. One of Imani's cousins, a teenage girl who did not want to give her name for fear of reprisals, said she had tried to grab her as soon as she realised what was going on.
"A car looked like it was reversing and a guy came and walked in," she said. "When I looked the man just come round and shoot at the place."
Despite a shot tearing past her face, the girl did her best to help Imani. "I looked and realised my little cousin was sat down right here," she said, pointing to the shop's freezer cabinet. "I grabbed her and she'd been shot in the head and she just dropped down." Her cousin's body, she said, had already gone limp.
Imani's sister, Jamila Palmer, who was nearby, told the BBC: "We heard gunshots. We ran outside and shouted 'Imani! Imani! Imani!'
"I picked her up off the ground and realised she was still breathing. I flagged down a car and they drove us to hospital. The rest is history."
Imani's mother, Donna, is understood to have left her daughter to play with her cousins at the store while she went shopping in the nearby town of Falmouth. She had been due to pick her up on her return, but let Imani play on because she was enjoying spending time with her family.
On Sunday the raw-board shack still bore the scars of the shooting. Among the dominoes, the imported washing powder, packets of biscuits and the bags of corn puffs, at least four bullet holes could be seen: one in the wooden counter; one in the back wall; one in a tin of paint, and one, oddly, behind the fridge – the result, perhaps, of a ricocheting round.
Jamaican police said there were a number of lines of inquiry but they were considering the theory that the shooting was retaliation for an earlier gun attack.
They also said Imani had not been the intended target, and stressed there was no suggestion her family was involved in gang violence.
Imani's cousin, Michael Brady, said the family was struggling to come to terms with what had happened. "We really feel it," he said. "Right now I can't work. I can't go out. I just cry. I just wake up and cry."
Imani, who had sickle cell anaemia and had gone to Jamaica with the blessing of her school in the hope that the warm climate would ease her condition, had been on the island since 27 December and was due to return to London later this month.
Her brother Dean Palmer said the family had been devastated by the death of his sister, whom he described as "an extremely brave girl".
He said Imani went to Jamaica twice a year to help her cope with the disease, adding that although the family had been unsure about taking her this time, she was "back to her normal self" within a few days of arriving on the island.
Anne Wilson, the headteacher of Fircroft primary school in Tooting, where Imani was a pupil, said she was a "happy, playful child" who was popular with staff and children alike.
"She dealt with her illness very bravely and coped well with the special arrangements we had to have in place to support her," Wilson told the BBC.
"She had been given special permission to travel to Jamaica so she could benefit from the warmer climate and we had been in contact with the local primary school she was attending."
Neighbours in south London yesterday spoke of their sorrow at learning that Imani had been killed. One friend of the family, who asked not to be named, said: "This is a closeknit community, so this is going to hurt us."
Another added: "Nobody wants to speak, she was just a little girl. This is all so sad. We're distraught." Neighbours said members of Imani's family had left their home early on Sunday morning to fly to Jamaica to be with her mother.
Sadiq Khan, the shadow justice minister and MP for Tooting, said: "I am devastated to hear the news of eight-year-old schoolgirl Imani Green, a pupil at a Tooting primary school. This is terrible news."
The Foreign Office confirmed the death of a British national in Jamaica on Friday 11 January, and said it was providing consular assistance to the family, while the British honorary consul in Montego Bay described Imani's death as "a desperately sad event", adding that the consulate was doing what it could to help her relatives.
Jamaica's national security minister, Peter Bunting, told the Jamaica Gleaner: "The senseless killing of a young, innocent child must outrage all well-thinking Jamaicans, and cause us to join our security forces in an intensified effort to rid our communities of criminals."

The Evolution Of Chinese Painting - How An "Old Lotus" Brought Portraits Back In Vogue

By Spiritual Mouse Den ECONOMIC OBSERVER/Worldcrunch

BEIJING - In the history of Eastern and Western art, the aesthetic standards for painting have been more or less the same. The most esteemed paintings were large scenes with people in them. They can be broken down into the two categories, of either historical or  religious nature.
The classic scene of Christ being taken down from the cross naturally involves a lot of other characters, the Virgin Mary and the repented Mary Magdalene being the most familiar. Where more than one person was depicted, the painting required both more skill and more effort.
In China, religion was relatively less important. Nevertheless, the paintings can be also divided in two categories, depicting either emperors and lords or the religious themes of Buddhism and Taoism.
However, as the Chinese dynasties progressed the way people were depicted in paintings changed. Painted during the Six Dynasties (220-589 AD) – a period of disunity, instability and warfare – the famous “Nymph of the Luo River,” by Gu Kaizhi, shows human figures that are bigger than the mountains and the trees.
But by the High Tang Dynasty (late 7^th to mid-8^th century), the golden age in which China was at its pinnacle of culture and power, the Shan Shui (“mountain and water”) style of landscape painting in brush and ink had become the prominent art form. The painting “Emperor Ming-huang’s Journey to Shu,” by Li Zhaodao, shows Emperor Xuanzong of Tang (685-762 AD) trapped in the Sichuan province during the Anshi Rebellion. The mountains are towering and majestic whereas the figures are tiny in comparison. The emperor, even though he is riding a horse, is almost too small to be seen. If one were not careful he might be overlooked entirely.     
If an emperor was depicted this way in paintings, one can imagine what it was like for ordinary people. Those who painted human portraits were considered to be “craftsmen” by the landscape painters.
The three major factions of painters during the Northern Song Dynasty (960-1127) were all Shan Shui artists.
During the Southern Song Dynasty (1127-1279), apart from Liu Song Lian, who was a painter of Buddhist and Taoist themes, the four major factions of painters also mainly painted landscapes.     
In the Yuan or Mongol Dynasty (1279-1368), ink monochrome landscapes were the only standard for valued painters. Ni Zan (1301-1374), one of the “Four Masters of Yuan,” never represented people, deeming that they would “sully” the painting.
Dong Qichang (1555-1636), a prominent Ming Dynasty painter as well as calligrapher, was a typical follower of Ni Zan. He rarely represented people, and when he did, they were depicted in hasty and cursory brushwork, the eyebrow and moustache blurred together without any detail.
It was the Ming Dynasty (1368-1644) masters who put an end to the suppression of human depictions in painting, which had lasted a thousand years. They rejuvenated portrait painting. These masters included Wen Zhengming (1470–1559), along with his contemporaries Tang Bohu (1470-1524) and Qiu Ying (1495-1552) all from the city of Suzhou, in the province of Jiangsu in Eastern China.
The impact of Old Lotus
But it was Chen Hongshou (1598-1652), known under the sobriquet Chen Laolian ("laolian" means “old lotus”), who undoubtedly possessed the greatest skill, making the greatest impact and having the finest style.
Unlike the relaxed brushstrokes of his paintings – solid and long – the Old Lotus only lived to be 54. According to the history books, he had offended an important official and was killed. This wouldn’t be at all surprising in the chaotic times of the Ming Dynasty.
Extremely lecherous as he advanced in years, the Old Lotus more or less lived in brothels. Money did not mean much to him, but sponsoring him with the gift of a fine lady was the way to get him to work right away. One can only imagine the extraordinary vitality that he had!
The Ming Dynasty had a retro atmosphere. In art, the yardstick of aesthetics was to copy the ancient masters. Particular attention was paid not just to the appearance on the surface, but it had also to be skin deep and authentic. Old Lotus was the master of this. His paintings had the charm of the Qin and the Tang Dynasties, imprinted with the strangeness of line and elegance.  
By the mid-Ching Dynasty, Chinese portrait painters were gradually released from the pressure to produce landscape paintings. And from the late-Ching Dynasty through the Nationalist period and Communist China, basically all of the Southern Chinese figure painters have absorbed their artistic nutrition from the Old Lotus.

Read the article in the original language.
Photo by - Chen Hongshou
All rights reserved ©Worldcrunch - in partnership with ECONOMIC OBSERVER

Will digital addiction clinics be big in 2013?

Mobile and social media are the driving forces of the next wave of digital change. But these advances are reducing our attention spans and creating new dilemmas for the way we live and work, says Nic Newman.

It used to be the case that British people had a reputation for buttoned-up restraint.
Today we are some of the most active social networkers in the world - sharing our party pictures, our music playlists and our deepest secrets with hardly a moment's thought. More than 60% of online users actively maintain a Facebook profile, and social networking is our favourite activity online in terms of time spent.
Sir Tim Berners-Lee's tweet to the world at the Olympics opening ceremony was a reminder that social networking is now a key part of our national culture. Twitter usage has jumped rapidly again this year to about 10 million active users, with David Cameron, Hugh Grant and Gary Lineker among the new recruits.

Continue reading the main story

“Start Quote

This is for everyone”

• Sir Tim Berners-Lee's Olympic tweet

And in terms of mobile, the UK now leads the world in its use of data. It overtook Japan in 2012, according to Ofcom.

There is, of course, a link between the two. More than 40% of that mobile activity is driven by social networking, in addition to downloading videos, shopping and consuming timely information such as news and sport.
With record smartphone sales in the run-up to Christmas and new 4G services launching in the UK by the summer, the stage is now set for faster and more reliable connection speeds and a new generation of mobile products and services.
So what will the potent combination of social and mobile bring in 2013? Here are seven trends to watch out for:

1. The mobile wallet

Increasing amounts of our life will be controlled with our mobiles in 2013. One by one, bank cards, loyalty cards, travel cards and boarding passes are being sucked out of our physical wallets and becoming integrated into smartphone software.
On the one hand this is driving convenience and greater transparency. On the other, the implications of losing your mobile have never been greater - and smartphone theft is on the rise.
Expect a new wave of sophisticated apps that can locate your phone even if on silent - complete with James Bond-style capabilities to destroy your device while protecting your passwords and identity.

2. Stand by for mobile ads

Continue reading the main story

“Start Quote

At least one social network will offer a premium service without ads”

More than 10% of consumer time is spent with the mobile phone but only 1% of advertising is spent this way. This gap will close in 2013 but the results may not be pretty.

Watch out for intrusive new advertising formats on mobile and social websites, text and other push advertising, location-based special promotions linked to shopping in particular, and a growing number of sponsored messages.
Expect some kind of backlash against commercial activity in this most personal space with new rows over privacy and the selling of personal data. There'll be a new breed of mobile ad blockers and at least one social network will offer a premium service with an ad-free experience this year.

3. Celebrity spam

It's not just advertisers trying to make friends. Recording artist and talent show judge Will.i.am broke a taboo in 2012 by using his mobile to tweet during a live edition of The Voice. He later posted this message: "It may seem odd me tweeting... but trust me... this will be the norm one day & people are going to copy it."
Celebrities are increasingly setting up their own direct routes of communication with fans and will be looking to exploit these further with social media messages, mobile apps and text alerts.
Instead of fans hounding celebrities, this year could see the opposite phenomenon in the digital space. Broadcasters are already enlisting stars to send "in character" text messages before, during and after television dramas to give true fans an extra dimension of experience.

4. Global megaphone for gossip

The combination of mobile and social media has increased the speed with which both genuine news and malicious gossip can spread around the world.
Lord Justice Leveson has called for new laws to end what he calls "mob rule" and "trial by Twitter". Expect to see more unsuccessful attempts by politicians and lawyers to tame the internet but also a gradual realisation that what is said on social media is not beyond the law.
Look out for high-profile Twitter and Facebook prosecutions along with new social media education programmes in schools and workplaces.

5. Mobile and social news

About a third of all traffic to leading news websites such as the BBC now comes from smartphones, and this trend is beginning to change the type of news we are consuming and the rate at which we do it.
Live blogs - short updates that incorporate the backchat from social media - are becoming increasingly popular for news and sport but younger people in particular are increasingly ignoring traditional sites and getting their news directly from links in their Twitter or Facebook streams.
A trend to watch in 2013 is the growth of social video services like ThisNewsNow - a mobile-first service with a focus on short viral videos and a new informal style.

6. Digital addiction clinics

Continue reading the main story

“Start Quote

New opportunities, then, for internet-free rural retreats”

Related to the above, you may have noticed that your partner has been checking the football scores at the dinner table or sharing a joke on Facebook with friends half the way across the world.

More and more of us are becoming addicted to the real-time stream so that we are losing the art of conversation and quiet reflection.
This year brands and phone manufacturers will find more and more ways - buzzes, shakes, pokes and vibrates - to interrupt your train of thought. New opportunities, then, in 2013 for internet-free rural retreats or sessions to relearn the art of conversation without interruption, hesitation or deviation.

7. Mobile controlled accessories

Modelling a pair of internet-enabled specs

This year the phone will start to control what we see and what we wear. Google Glass and Vuzix (available this year) are essentially mobile computers that take augmented reality to the next stage.
Now you don't even need to look under the table to get the football results - they can be beamed directly to your eyes. Face recognition linked to Facebook or LinkedIn can provide an instant biography at a party, saving much embarrassment or providing useful lines for a potential business opportunity.
And for the more flamboyant, there are dresses implanted with electronic displays that project your latest social media updates onto the fabric.
Social and mobile will be at the heart of digital innovation this year. And yet, most companies continue to underestimate the speed and impact of these changes. They remain locked in a desktop mentality, leaving their products and services in danger of becoming irrelevant to a new digital savvy generation.
But institutions and governments are also lagging dangerously behind, not least because mobile and social undermine traditional hierarchies and decision-making processes. More flexible thinking, more flexible content that works with these trends needs to be embraced at every level and 2013 is the year when that will seem more obvious than ever.
Nic Newman is a digital strategist and former BBC Future Media executive. He is also a research associate at the Reuters Institute for the Study of Journalism at Oxford University.

Can America Be Fixed?

In November, the American electorate, deeply unhappy with Washington and its political gridlock, voted to maintain precisely the same distribution of power -- returning President Barack Obama for a second term and restoring a Democratic Senate and a Republican House of Representatives. With at least the electoral uncertainty out of the way, attention quickly turned to how the country's lawmakers would address the immediate crisis known as the fiscal cliff -- the impending end-of-year tax increases and government spending cuts mandated by earlier legislation.
As the United States continues its slow but steady recovery from the depths of the financial crisis, nobody actually wants a massive austerity package to shock the economy back into recession, and so the odds have always been high that the game of budgetary chicken will stop short of disaster. Looming past the cliff, however, is a deep chasm that poses a much greater challenge -- the retooling of the country's economy, society, and government necessary for the United States to perform effectively in the twenty-first century. The focus in Washington now is on taxing and cutting; it should be on reforming and investing. The United States needs serious change in its fiscal, entitlement, infrastructure, immigration, and education policies, among others. And yet a polarized and often paralyzed Washington has pushed dealing with these problems off into the future, which will only make them more difficult and expensive to solve.
Studies show that the political divisions in Washington are at their worst since the years following the Civil War. Twice in the last three years, the world's leading power -- with the largest economy, the global reserve currency, and a dominant leadership role in all international institutions -- has come close to committing economic suicide. The American economy remains extremely dynamic. But one has to wonder whether the U.S. political system is capable of making the changes that will ensure continued success in a world of greater global competition and technological change. Is the current predicament, in other words, really a crisis of democracy?

In 1980, the United States' gross government debt was 42 percent of its total GDP; it is now 107 percent.

That phrase might sound familiar. By the mid-1970s, growth was stagnating and inflation skyrocketing across the West. Vietnam and Watergate had undermined faith in political institutions and leaders, and newly empowered social activists were challenging establishments across the board. In a 1975 report from the Trilateral Commission entitled The Crisis of Democracy, distinguished scholars from the United States, Europe, and Japan argued that the democratic governments of the industrial world had simply lost their ability to function, overwhelmed by the problems they confronted. The section on the United States, written by the political scientist Samuel Huntington, was particularly gloomy.
We know how that worked out: within several years, inflation was tamed, the American economy boomed, and confidence was restored. A decade later, it was communism and the Soviet Union that collapsed, not capitalism and the West. So much for the pessimists.
And yet just over two decades further on, the advanced industrial democracies are once again filled with gloom. In Europe, economic growth has stalled, the common currency is in danger, and there is talk that the union itself might split up. Japan has had seven prime ministers in ten years, as the political system splinters, the economy stagnates, and the country slips further into decline. But the United States, given its global role, presents perhaps the most worrying case.
Is there a new crisis of democracy? Certainly, the American public seems to think so. Anger with politicians and institutions of government is much greater than it was in 1975. According to American National Election Studies polls, in 1964, 76 percent of Americans agreed with the statement "You can trust the government in Washington to do what is right just about always or most of the time." By the late 1970s, that number had dropped to the high 40s. In 2008, it was 30 percent. In January 2010, it had fallen to 19 percent.
Commentators are prone to seeing the challenges of the moment in unnecessarily apocalyptic terms. It is possible that these problems, too, will pass, that the West will muddle through somehow until it faces yet another set of challenges a generation down the road, which will again be described in an overly dramatic fashion. But it is also possible that the public is onto something. The crisis of democracy, from this perspective, never really went away; it was just papered over with temporary solutions and obscured by a series of lucky breaks. Today, the problems have mounted, and yet American democracy is more dysfunctional and commands less authority than ever -- and it has fewer levers to pull in a globalized economy. This time, the pessimists might be right.
TRENDING NOW
The mid-1970s predictions of doom for Western democracy were undone by three broad economic trends: the decline of inflation, the information revolution, and globalization. In the 1970s, the world was racked by inflation, with rates stretching from low double digits in countries such as the United States and the United Kingdom to 200 percent in countries such as Brazil and Turkey. In 1979, Paul Volcker became chair of the U.S. Federal Reserve, and within a few years, his policies had broken the back of American inflation. Central banks across the world began following the Fed's example, and soon, inflation was declining everywhere.
Technological advancement has been around for centuries, but beginning in the 1980s, the widespread use of computers and then the Internet began to transform every aspect of the economy. The information revolution led to increased productivity and growth in the United States and around the world, and the revolution looks to be a permanent one.
Late in that decade, partly because the information revolution put closed economies and societies at an even greater disadvantage, the Soviet empire collapsed, and soon the Soviet Union itself followed. This allowed the Western system of interconnected free markets and societies to spread across most of the world -- a process that became known as globalization. Countries with command or heavily planned economies and societies opened up and began participating in a single global market, adding vigor to both themselves and the system at large. In 1979, 75 countries were growing by at least four percent a year; in 2007, just before the financial crisis hit, the number had risen to 127.
These trends not only destroyed the East but also benefited the West. Low inflation and the information revolution enabled Western economies to grow more quickly, and globalization opened up vast new markets filled with cheap labor for Western companies to draw on and sell to. The result was a rebirth of American confidence and an expansion of the global economy with an unchallenged United States at the center. A generation on, however, the Soviet collapse is a distant memory, low inflation has become the norm, and further advances in globalization and information technology are now producing as many challenges for the West as opportunities.

With only a few exceptions, the advanced industrial democracies have spent the last few decades managing or ignoring their problems rather than tackling them head-on.

The jobs and wages of American workers, for example, have come under increasing pressure. A 2011 study by the McKinsey Global Institute found that from the late 1940s until 1990, every recession and recovery in the United States followed a simple pattern. First, GDP recovered to its pre-recession level, and then, six months later (on average), the employment rate followed. But then, that pattern was broken. After the recession of the early 1990s, the employment rate returned to its pre-recession level 15 months after GDP did. In the early part of the next decade, it took 39 months. And in the current recovery, it appears that the employment rate will return to its pre-recession level a full 60 months -- five years -- after GDP did. The same trends that helped spur growth in the past are now driving a new normal, with jobless growth and declining wages.
MAGIC MONEY
The broad-based growth of the post-World War II era slowed during the mid-1970s and has never fully returned. The Federal Reserve Bank of Cleveland recently noted that in the United States, real GDP growth peaked in the early 1960s at more than four percent, dropped to below three percent in the late 1970s, and recovered somewhat in the 1980s only to drop further in recent years down to its current two percent. Median incomes, meanwhile, have barely risen over the last 40 years. Rather than tackle the underlying problems or accept lower standards of living, the United States responded by taking on debt. From the 1980s on, Americans have consumed more than they have produced, and they have made up the difference by borrowing.
President Ronald Reagan came to power in 1981 as a monetarist and acolyte of Milton Friedman, arguing for small government and balanced budgets. But he governed as a Keynesian, pushing through large tax cuts and a huge run-up in defense spending. (Tax cuts are just as Keynesian as government spending; both pump money into the economy and increase aggregate demand.) Reagan ended his years in office with inflation-adjusted federal spending 20 percent higher than when he started and with a skyrocketing federal deficit. For the 20 years before Reagan, the deficit was under two percent of GDP. In Reagan's two terms, it averaged over four percent of GDP. Apart from a brief period in the late 1990s, when the Clinton administration actually ran a surplus, the federal deficit has stayed above the three percent mark ever since; it is currently seven percent.
John Maynard Keynes' advice was for governments to spend during busts but save during booms. In recent decades, elected governments have found it hard to save at any time. They have run deficits during busts and during booms, as well. The U.S. Federal Reserve has kept rates low in bad times but also in good ones. It's easy to blame politicians for such one-handed Keynesianism, but the public is as much at fault. In poll after poll, Americans have voiced their preferences: they want low taxes and lots of government services. Magic is required to satisfy both demands simultaneously, and it turned out magic was available, in the form of cheap credit. The federal government borrowed heavily, and so did all other governments -- state, local, and municipal -- and the American people themselves. Household debt rose from $665 billion in 1974 to $13 trillion today. Over that period, consumption, fueled by cheap credit, went up and stayed up.
Other rich democracies have followed the same course. In 1980, the United States' gross government debt was 42 percent of its total GDP; it is now 107 percent. During the same period, the comparable figure for the United Kingdom moved from 46 percent to 88 percent. Most European governments (including notoriously frugal Germany) now have debt-to-GDP levels that hover around 80 percent, and some, such as Greece and Italy, have ones that are much higher. In 1980, Japan's gross government debt was 50 percent of GDP; today, it is 236 percent.
The world has turned upside down. It used to be thought that developing countries would have high debt loads, because they would borrow heavily to finance their rapid growth from low income levels. Rich countries, growing more slowly from high income levels, would have low debt loads and much greater stability. But look at the G-20 today, a group that includes the largest countries from both the developed and the developing worlds. The average debt-to-GDP ratio for the developing countries is 35 percent; for the rich countries, it is over three times as high.
REFORM AND INVEST
When Western governments and international organizations such as the International Monetary Fund offer advice to developing countries on how to spur growth, they almost always advocate structural reforms that will open up sectors of their economies to competition, allow labor to move freely between jobs, eliminate wasteful and economically distorting government subsidies, and focus government spending on pro-growth investment. When facing their own problems, however, those same Western countries have been loath to follow their own advice.
Current discussions about how to restore growth in Europe tend to focus on austerity, with economists debating the pros and cons of cutting deficits. Austerity is clearly not working, but it is just as clear that with debt burdens already at close to 90 percent of GDP, European countries cannot simply spend their way out of their current crisis. What they really need are major structural reforms designed to make themselves more competitive, coupled with some investments for future growth.

The danger for Western democracies is not death but sclerosis.

Not least because it boasts the world's reserve currency, the United States has more room to maneuver than Europe. But it, too, needs to change. It has a gargantuan tax code that, when all its rules and regulations are included, totals 73,000 pages; a burdensome litigation system; and a crazy patchwork of federal, state, and local regulations. U.S. financial institutions, for example, are often overseen by five or six different federal agencies and 50 sets of state agencies, all with overlapping authority.
If the case for reform is important, the case for investment is more urgent. In its annual study of competitiveness, the World Economic Forum consistently gives the United States poor marks for its tax and regulatory policies, ranking it 76th in 2012, for example, on the "burden of government regulations." But for all its complications, the American economy remains one of the world's most competitive, ranking seventh overall -- only a modest slippage from five years ago. In contrast, the United States has dropped dramatically in its investments in human and physical capital. The WEF ranked American infrastructure fifth in the world a decade ago but now ranks it 25th and falling. The country used to lead the world in percentage of college graduates; it is now ranked 14th. U.S. federal funding for research and development as a percentage of GDP has fallen to half the level it was in 1960 -- while it is rising in countries such as China, Singapore, and South Korea. The public university system in the United States -- once the crown jewel of American public education -- is being gutted by budget cuts.
The modern history of the United States suggests a correlation between investment and growth. In the 1950s and 1960s, the federal government spent over five percent of GDP annually on investment, and the economy boomed. Over the last 30 years, the government has been cutting back; federal spending on investment is now around three percent of GDP annually, and growth has been tepid. As the Nobel Prize-winning economist Michael Spence has noted, the United States escaped from the Great Depression not only by spending massively on World War II but also by slashing consumption and ramping up investment. Americans reduced their spending, increased their savings, and purchased war bonds. That boost in public and private investment led to a generation of postwar growth. Another generation of growth will require comparable investments.
The problems of reform and investment come together in the case of infrastructure. In 2009, the American Society of Civil Engineers gave the country's infrastructure a grade of D and calculated that repairing and renovating it would cost $2 trillion. The specific number might be an exaggeration (engineers have a vested interest in the subject), but every study shows what any traveler can plainly see: the United States is falling badly behind. This is partly a matter of crumbling bridges and highways, but it goes well beyond that. The U.S. air traffic control system is outdated and in need of a $25 billion upgrade. The U.S. energy grid is antique, and it malfunctions often enough that many households are acquiring that classic symbol of status in the developing world: a private electrical generator. The country's drinking water is carried through a network of old and leaky pipes, and its cellular and broadband systems are slow compared with those of many other advanced countries. All this translates into slower growth. And if it takes longer to fix, it will cost more, as deferred maintenance usually does.
Spending on infrastructure is hardly a panacea, however, because without careful planning and oversight, it can be inefficient and ineffective. Congress allocates money to infrastructure projects based on politics, not need or bang for the buck. The elegant solution to the problem would be to have a national infrastructure bank that is funded by a combination of government money and private capital. Such a bank would minimize waste and redundancy by having projects chosen by technocrats on merit rather than by politicians for pork. Naturally, this very idea is languishing in Congress, despite some support from prominent figures on both sides of the aisle.
The same is the case with financial reforms: the problem is not a lack of good ideas or technical feasibility but politics. The politicians who sit on the committees overseeing the current alphabet soup of ineffective agencies are happy primarily because they can raise money for their campaigns from the financial industry. The current system works better as a mechanism for campaign fundraising than it does as an instrument for financial oversight.
In 1979, the social scientist Ezra Vogel published a book titled Japan as Number One, predicting a rosy future for the then-rising Asian power. When The Washington Post asked him recently why his prediction had been so far off the mark, he pointed out that the Japanese economy was highly sophisticated and advanced, but, he confessed, he had never anticipated that its political system would seize up the way it did and allow the country to spiral downward.
Vogel was right to note that the problem was politics rather than economics. All the advanced industrial economies have weaknesses, but they also all have considerable strengths, particularly the United States. They have reached a stage of development, however, at which outmoded policies, structures, and practices have to be changed or abandoned. The problem, as the economist Mancur Olson pointed out, is that the existing policies benefit interest groups that zealously protect the status quo. Reform requires governments to assert the national interest over such parochial interests, something that is increasingly difficult to do in a democracy.
POLITICAL DEMOGRAPHY
With only a few exceptions, the advanced industrial democracies have spent the last few decades managing or ignoring their problems rather than tackling them head-on. Soon, this option won't be available, because the crisis of democracy will be combined with a crisis of demography.
The industrial world is aging at a pace never before seen in human history. Japan is at the leading edge of this trend, predicted to go from a population of 127 million today to just 47 million by the end of the century. Europe is not far behind, with Italy and Germany approaching trajectories like Japan's. The United States is actually the outlier on this front, the only advanced industrial country not in demographic decline. In fact, because of immigration and somewhat higher fertility rates, its population is predicted to grow to 423 million by 2050, whereas, say, Germany's is predicted to shrink to 72 million. Favorable U.S. demographics, however, are offset by more expensive U.S. entitlement programs for retirees, particularly in the area of health care.
To understand this, start with a ratio of working-age citizens to those over 65. That helps determine how much revenue the government can get from workers to distribute to retirees. In the United States today, the ratio is 4.6 working people for every retiree. In 25 years, it will drop to 2.7. That shift will make a huge difference to an already worrisome situation. Current annual expenditures for the two main entitlement programs for older Americans, Social Security and Medicare, top $1 trillion. The growth of these expenditures has far outstripped inflation in the past and will likely do so for decades to come, even with the implementation of the Affordable Care Act. Throw in all other entitlement programs, the demographer Nicholas Eberstadt has calculated, and the total is $2.2 trillion -- up from $24 billion a half century ago, nearly a hundredfold increase.
However worthwhile such programs may be, they are unaffordable on their current trajectories, consuming the majority of all federal spending. The economists Carmen Reinhart and Kenneth Rogoff argued in their detailed study of financial crises, This Time Is Different, that countries with debt-to-GDP burdens of 90 percent or more almost invariably have trouble sustaining growth and stability. Unless its current entitlement obligations are somehow reformed, with health-care costs lowered in particular, it is difficult to see how the United States can end up with a ratio much lower than that. What this means is that while the American right has to recognize that tax revenues will have to rise significantly in coming decades, the American left has to recognize that without significant reforms, entitlements may be the only thing even those increased tax revenues will cover. A recent report by Third Way, a Washington-based think tank lobbying for entitlement reform, calculates that by 2029, Social Security, Medicare, Medicaid, and interest on the debt combined will amount to 18 percent of GDP. It just so happens that 18 percent of GDP is precisely what the government has averaged in tax collections over the last 40 years.
The continued growth in entitlements is set to crowd out all other government spending, including on defense and the investments needed to help spur the next wave of economic growth. In 1960, entitlement programs amounted to well under one-third of the federal budget, with all the other functions of government taking up the remaining two-thirds. By 2010, things had flipped, with entitlement programs accounting for two-thirds of the budget and everything else crammed into one-third. On its current path, the U.S. federal government is turning into, in the journalist Ezra Klein's memorable image, an insurance company with an army. And even the army will have to shrink soon.
Rebalancing the budget to gain space for investment in the country's future is today's great American challenge. And despite what one may have gathered during the recent campaign, it is a challenge for both parties. Eberstadt points out that entitlement spending has actually grown faster under Republican presidents than under Democrats, and a New York Times investigation in 2012 found that two-thirds of the 100 U.S. counties most dependent on entitlement programs were heavily Republican.
Reform and investment would be difficult in the best of times, but the continuation of current global trends will make these tasks ever tougher and more urgent. Technology and globalization have made it possible to do simple manufacturing anywhere, and Americans will not be able to compete for jobs against workers in China and India who are being paid a tenth of the wages that they are. That means that the United States has no choice but to move up the value chain, relying on a highly skilled work force, superb infrastructure, massive job-training programs, and cutting-edge science and technology -- all of which will not materialize without substantial investment.
The U.S. government currently spends $4 on citizens over 65 for every $1 it spends on those under 18. At some level, that is a brutal reflection of democratic power politics: seniors vote; minors do not. But it is also a statement that the country values the present more than the future.
TURNING JAPANESE
Huntington, the author of the section on the United States in the Trilateral Commission's 1975 report, used to say that it was important for a country to worry about decline, because only then would it make the changes necessary to belie the gloomy predictions. If not for fear of Sputnik, the United States would never have galvanized its scientific establishment, funded NASA, and raced to the moon. Perhaps that sort of response to today's challenges is just around the corner -- perhaps Washington will be able to summon the will to pass major, far-reaching policy initiatives over the next few years, putting the United States back on a clear path to a vibrant, solvent future. But hope is not a plan, and it has to be said that at this point, such an outcome seems unlikely.
The absence of such moves will hardly spell the country's doom. Liberal democratic capitalism is clearly the only system that has the flexibility and legitimacy to endure in the modern world. If any regimes collapse in the decades ahead, they will be command systems, such as the one in China (although this is unlikely). But it is hard to see how the derailing of China's rise, were it to happen, would solve any of the problems the United States faces -- and in fact, it might make them worse, if it meant that the global economy would grow at a slower pace than anticipated.
The danger for Western democracies is not death but sclerosis. The daunting challenges they face -- budgetary pressures, political paralysis, demographic stress -- point to slow growth rather than collapse. Muddling through the crisis will mean that these countries stay rich but slowly and steadily drift to the margins of the world. Quarrels over how to divide a smaller pie may spark some political conflict and turmoil but will produce mostly resignation to a less energetic, interesting, and productive future.
There once was an advanced industrial democracy that could not reform. It went from dominating the world economy to growing for two decades at the anemic average rate of just 0.8 percent. Many members of its aging, well-educated population continued to live pleasant lives, but they left an increasingly barren legacy for future generations. Its debt burden is now staggering, and its per capita income has dropped to 24th in the world and is falling. If the Americans and the Europeans fail to get their acts together, their future will be easy to see. All they have to do is look at Japan.