Issue 77 â– May 2012
Exclusive to Emirates First Class and Business Class
SOLAR POWER India Aims Green UK REAL ESTATE Two Different Stories AFRICAN GROWTH A Sensible Approach
Larry Summers The Power of Money
EvEry rolEx is madE for grEatnEss. thE submarinEr, introducEd i n 19 53 , wa s th E f i r s t watc h to b E wat E r r E s i s ta n t up to 10 0 mE tr E s . it wa s l atEr strEng thEnEd by its patEntEd tr iplE-sE al triplock winding crown, making it capablE of withstanding dEpths of up to 300 mE trE s.
t he subm a r ine r d ate
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This issue May 2012
Exclusive to Emirates First Class and Business Class
Economist Larry Summers has a CV that includes being the president of Harvard to Treasury Secretary under the Clinton Administration and President Obama’s Chief Economic Advisor. But now that he’s left government there is one thing that really excites him – the role of technology in economics. And the best place to explore that is Silicon Valley.
Features 38 Property Market Reveals a Divided Britain
52 India’s Solar Ambitions
In central London, the value of millionaires’ houses is rising
By 2020 the Indian government wants to obtain 20,000
even faster than expected. In Hartlepool, it’s a different story.
megawatts from solar power. Some analysts said it couldn’t be done, but they may have to eat their words.
44 China’s Secretive Tech Giant Huawei, China’s biggest exporter, has lofty ambitions. But
56 Japan Courts Investment
if it wants to crack the global market it may have to learn
Strong regulations, high operating costs and weak government
to be more open.
inducements have prevented foreign capital investment in Japan. But that may be changing.
48 Africa’s Growing Ambition The continent’s GDP is growing at five per cent and foreign
60 App Store Under Attack
investment has risen six-fold. But there are other integral
Apple’s App Store appears to be the victim of its own
reasons why Africa’s future is looking bright.
success with increasing incidents of account hacking and fraudulent apps.
COVER PHOTO: DAVID DEAL/REDUX/EYEVINE
Cover Story 32 The Power of Money
Exclusive to Emirates First Class and Business Class
65 A Reflection of Time Malaysia’s oldest city has always been a melting pot of cultures. It is this vibrant blend that creates Malacca’s unique atmosphere, architecture and food.
70 One Man’s Eccentric Passion Bernardo Paz, a Brazilian mining magnate, has created a vast garden of art that drew nearly 250,000 visitors last year.
74 Record Inclination When the Leaning Tower of Pisa was straightened, contenders emerged for its crown as the most tilting tower. The current record holder is in Germany, but St. Moritz may have a winner.
78 Objects of Desire On the eve of the 50th anniversary of Marilyn Monroe’s death, memorabilia associated with the screen legend
continues to command record-breaking prices.
82 Evita’s Buenos Aires Following in the footsteps of Eva Peron is one way to see the Argentine capital and get a history lesson at the same time.
86 Winning Ways The ML 500 4MATIC BlueEFFICIENCY, now in its third generation, is back better than ever.
88 Other Business
Portfolio takes a light-hearted look at the latest business news.
17 Notebook World business in a nutshell.
23 Observer Spotting and analysing business trends.
30 Column: Julie Bosman The End of Printed Encyclopaedias
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BUSINESS NEWS IN BRIEF
Buoyant Outlook for Floating Homes It used to be the stuff of
Waterstudio has designed a network of
and floating homes on the River Maas in
science fiction, but around the world
floating islands, the first to be put in
2005. All survived the major 2011 floods
architects and city planners are exploring
place next year, to accommodate hotels, a
that forced the evacuation of villages
ways mankind and water may be able
convention centre, yacht club and villas.
along rain-swollen rivers.
to coexist as oceans rise and other
The â€˜islands,â€™ secured by steel cables, are
phenomenon induced by climate change,
made up of pontoons with a foam core
Netherlands on the New Water estate,
including extreme, erratic floods,
encased in concrete that can be joined
600 homes and a luxury apartment
threaten land-rooted living.
together like Lego blocks. An 18-hole golf
complex on land purposely inundated.
course will also be set on such platforms,
In Britain, planning permission has
in the cutting-edge field of aqua-
each with two to three holes, connected
been granted to the first amphibious
architecture are already in place,
by underwater tunnels. The $500
house, along the banks of the Thames
including a maritime housing estate,
million project, paid for by the Maldivian
River in Buckinghamshire. In Thailand,
floating prison and greenhouses in the
government and private investors, is
which was devastated by floods last
slated for completion in 2015. A floating
September, a pilot amphibious house is
mosque, originally destined for Dubai, is
With the Dutch at the helm, projects
The Netherlands, a third of which lies below sea level, has been managing water since the Middle Ages and has
also part of the master plan. The Dutch have reversed some of their
Construction recently began in the
According to the UN Intergovernmental Panel on Climate Change cities such as
thus emerged as a pioneer in the field. It
earlier strategy of tightly defending their
Tokyo, London, Jakarta, Sydney, Bangkok
has exported its expertise to Indonesia,
land with dikes by allowing the sea to
and Shanghai are projected by the end
China, Thailand, Dubai and the Republic
penetrate some areas on which housing
of this century to lie totally or partially
of the Maldives.
has been constructed. One pioneering
under water as global warming boosts
effort was the placement of amphibious
sea levels. n
In the Maldives, the Dutch firm May 2012
Notebook Unlocking Kenya’s Gridlock
billion, a recordbreaking deal for a sports team, earns Us basketball legend earvin “Magic” Johnson ownership of the Los angeles Dodgers club. the deal, financed by a consortium spearheaded by Magic Johnson, includes investment banking firm guggenheim Capital and hollywood producer peter guber.
-feet-dive in the pacific Ocean’s Mariana trench by filmmaker James Cameron makes him the first human to dive alone to the deepest part on the planet. Cameron spent three hours collecting research samples and images for scientists before making a two hour and 36 minutes journey back to the surface. DBs group holding Ltd a controlling stake in indonesia’s Bank Danamon. indonesia’s economy grew 6.5 per cent in 2011, the highest rate since 1996. the newly established banking platform aims to tap into this growth.
The World In Figures
billion cut in budget spending by the spanish government sets the nation on one of the toughest austerity drives in its history. Changes will include freezing public sector workers’ salaries and reducing departmental budgets by 16.9 per cent.
Motorists in Nairobi, the Kenyan capital, compete with trucks ferrying cargo between Mombasa, East Africa’s biggest port, and the landlocked neighbours of Uganda and Rwanda, all on a road that runs through the middle of Nairobi. In response, Kenya is building more roads than it has since independence half a century ago. At least 80 billion shillings ($970 million) is being spent over five years on more than 500 kilometres of new roads
trillion financial firewall deal has been reached by eurozone nations. this creates a permanent mechanism to bail out troubled eurozone nations. this enhanced fund seeks to prevent the two-year-old sovereign debt crises from engulfing larger economies such as spain and italy.
billion acquisition, the biggest takeover by a southeast asian lender, gains
million registered spanish jobseekers in March hit a new record high in the nation’s unemployment figures. the Labour Ministry said the number of people filing for unemployment benefits rose by 38,769, with the services sector seeing the most jobs lost.
and on widening existing ones. The Kenyan government forecasts that the economic growth rate will double over the next two decades, to about 10 per cent. This positive economic outlook has enabled Kenya to borrow the money for much needed infrastructure upgrades. The flagship road project is
billion investment by samsung electronics is aimed at building its first computer chip factory. the world’s biggest memory chip maker wants to tap into the lucrative Chinese market and maintain an edge over its competitors.
the 27 billion-shilling upgrade of a route that connects Nairobi to the industrial town of Thika and onward to Kenya’s tea and farming heartland. Kenya is the world’s biggest exporter of black tea and supplies onethird of the flowers sold in the European Union. Portfolio
Banks’ Green Investments according to Bloomberg New
tonopah, Nevada. it also helped
energy Finance, global clean-
arrange $210 million in loans for
energy investments climbed five
First Wind holdings’ Whitman
per cent in 2011 to $260 billion.
County, Washington, wind farm. support for solar propelled
prices tumbled 51 per cent to
Bank of america to No. 2. the
88 cents per watt.
Charlotte, North Carolina-based
to rank banks’ environmental
lender provided a $1.4 billion
solar headed the list, after panel
records, Bloomberg rankings
loan to san Francisco’s prologis
looked at their efforts to
for solar systems on warehouse
reduce their own waste and
roofs. the bank also financed
acquisition of two solar parks
own greenhouse gases 6.4
carbon footprints and at their
the solarstrong project, which
in italy. it also cut total energy
per cent from 2009 levels.
investments in clean energy.
is en route to becoming the
use by more than six per cent
London’s Lloyds Banking
the Madrid-based bank
country’s largest residential
in 2010, climbing 17 places.
group provided £413 million
Fourth-placed Citigroup inched
($656 million) to 13 projects,
from fifth after investing $157
among them scotland’s Millour
santander retained its top spot thanks to its equity investment
in third spot was italy’s intesa
in the $1 billion Crescent
sanpaolo spa, which funded
million in California’s alta Wind
hill wind farm, to complete the
Dunes solar energy plant near
a €33 million ($44 million)
energy Centre and cutting its
African Retail Opportunities Mart decided to take a majority
will be adding 12 stores in
stake in the South African
countries like Nigeria and the
retailer Massmart (MSM) last
Democratic Republic of Congo
year is proof that Africa now
by the end of June, its CE
exists on the global retail map.
Whitey Basson said.
However, Africa does
pose challenges for formal
Woolworths Holdings is shifting
retail operations. Lack of
its focus from Australia to
infrastructure and limited
Africa, swapping its franchise-
According to Euromonitor
product (GDP) is forecast
energy supply affects businesses,
based model for a more involved
International, global retailers
to grow above five per cent
as does the volatile currency
joint venture strategy. The
need to have an African strategy
annually over the next five
risk. In a report examining
group’s African operations
to ensure long term growth and
years – two per cent more than
the barriers that stifle cross-
currently make up three per
diversify their source of income.
in developed markets. In 2011,
border trade within Africa,
cent of its total turnover, a
“Africa’s young urbanising
sales growth for the Middle
the World Bank revealed that
number they’re hoping to push
population and underdeveloped
East and Africa reached four
Africa’s largest retailer Shoprite
to 10 per cent.
retailing market means
per cent, making it the fastest
Holdings spends $20,000 a
there’s an unmet demand for
growing region for retailing
week in import permits to truck
Ethiopia and the Democratic
consumer goods,” Cedric Bra,
in the world, according to
meat, milk and other goods to
Republic of Congo have been
retailing analyst at Euromonitor
its stores in Zambia alone.
singled out as having large
International said. Africa’s gross domestic May 2012
According to Bra, the fact that the world’s largest retailer Wal-
Despite high trade barriers and supply challenges, Shoprite
Countries such as Nigeria,
potential for big scale retailers in the future.
Notebook DUBAI EVENT: AIRPORT SHOW WEBSITE: THEAIRPORTSHOW.COM DATE: 22-24 MAY, 2012 VENUE: DUBAI INTERNATIONAL CONVENTION & EXHIBITION CENTRE The 12th edition of the Airport Show is set to be the biggest event of its kind in the Middle East with the focus on the multi-billion dollar airport expansion projects underway in the UAE and other GCC countries. With over 200 multinational companies vying to tap into this growth opportunity, multi-million dollar deals are expected. The event provides extensive networking and business opportunities through a series of roundtable discussions, innovation and project seminars, and the hosted buyer programme.
EVENT NAME: MIDDLE EAST EVENT SHOW 2012 WEBSITE: ME-EVENTSHOW.COM DATE: 1-3 MAY, 2012 VENUE: DUBAI INTERNATIONAL CONVENTION & EXHIBITION CENTRE The Middle East Event Show is the event industry’s annual gathering that promotes collaboration with experts in the field. It presents an opportunity to examine the latest developments in event production with leading suppliers showcasing innovative event solutions, networking with more than 1,500 industry peers, and learning from experts at the free-to-attend seminars and social media forums.
United Arab Emirates
EVENT NAME: PALME MIDDLE EAST WEBSITE: PALME-MIDDLEEAST.COM DATE: 1-3 MAY, 2012 VENUE: DUBAI INTERNATIONAL CONVENTION & EXHIBITION CENTRE This is the region’s longest standing trade event for the professional sound, light, audio visual and entertainment industries. Connecting new products and leading suppliers from over 200 exhibitors and 800 brands, the event programme includes free-to-attend PALME conferences, product training and exhibitor-led technical workshops
EVENT NAME: ARAB MEDIA FORUM WEBSITE: ARABMEDIAFORUM.AE DATE: 8-9 MAY, 2012 VENUE: GRAND HYATT, DUBAI The UAE’s largest media gathering is the premier environment for media professionals to discuss and deliberate on crucial issues impacting the regional and international socio-political scenario. The forum is expected to draw 2,800 international journalists as well as influential decision makers, opinion leaders and high-profile speakers including Abdulaziz Al Shalan from New Media Expert, Saudi Arabia; Abdullatif Mustafa, Presenter of the YouTube show Nashrat Ghaseel and Abdul Wahab Badrakan, a writer and political analyst.
EVENT NAME: AUTOMECHANIKA MIDDLE EAST WEBSITE: AUTOMECHANIKAME.COM DATE: 22-24 MAY, 2012 VENUE: DUBAI INTERNATIONAL CONVENTION & EXHIBITION CENTRE The world’s leading companies in the automotive secondary market will showcase their expertise in manufacturing, distributing and installation of vehicle parts. Last year’s event welcomed 17,000 trade visitors from 130 countries checking out the 1,100 exhibiting companies. TEXT: HILDA D’SOUzA
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BUSINESS NEWS IN BRIEF
Rudiger Lippert works at Factual in Los Angeles, a company that is trying to become the world’s chief reference point for thousands of interconnected supercomputing clouds.
Storing the Universe of Facts Gilad Elbaz, a multi-millionaire who has already changed our lives, believes the world is one big data problem. His aim is to rectify that, reports Quentin Hardy. At seven yeArs old, GilAd elbAz
is definitely a new thing that will
known. He is so self-effacing that he
wrote, “I want to be a rich mathematician
change business, and a valuable new
recently walked through a conference of
and very smart.” That, he figured, would
tool for computing.”
3,000 data scientists, recognised only by
help him “discover things like time
the staff members of one of his investments.
machines, robots and machines that can
where once-unimaginably huge amounts
His mental and financial assets, he says, are
answer any question.”
of information are scoured for world-
like gifts he needs to deploy so the world
changing discoveries, Elbaz may be the
works better. “If all data was clear, a lot
accomplished big chunks of these goals. He
most influential inventor and investor.
fewer people would subtract value from the
has built web-traversing software robots
Besides Factual, he has interests in 30
world,” he says. “A lot more people would
and answered some very big questions
startups, including an incubator in San
for Google, along the way becoming a
Francisco dedicated to Big Data. Elbaz
millionaire several hundred times over.
also serves on the boards of the California
absorbed what Elbaz terms “many billions
His time-machine plans, however, have
Institute of Technology, his alma mater,
of individual facts we’ve collated.” Geared
been ditched for something he finds more
and the X Prize Foundation, which offers
to both big companies and smaller
important: trying to identify every fact
cash prizes to teams that meet challenges
software developers, it includes available
in the world, and to hold them all in a
in space flight, medicine and genomics.
government data, terabytes of corporate
company he calls Factual.
The company he sold to Google, Applied
data and information on 60 million
In the 34 years since, Elbaz has
© 2012 New York Times News service
In the booming world of Big Data,
Since its start in 2008, Factual has
“The world is one big data problem,”
Semantics, is the basis of Google’s AdSense
places in 50 countries, each described by
Elbaz says. He is a slim, soft-spoken man
business, which brings Google close to $10
17 to 40 attributes. Factual knows more
who weaves in his chair when an idea
billion in revenue annually.
than 800,000 restaurants in 30 different
excites him. “What if you could spot any error, as soon as you wrote it? Factual May 2012
While valued for his investments and guidance, Elbaz remains relatively little-
ways, including location, ownership and ratings by diners and health boards. It also
Observer contains information on half a billion web pages, a list of America’s high schools and data on the offices, specialties and insurance preferences of 1.8 million United States health care professionals. There are also listings of 14,000 wine grape varietals, of military aircraft accidents from 1950 to 1974, and of body masses of major celebrities. Odd facts matter too, Elbaz notes. He keeps 500 terabytes of storage near Factual’s headquarters. That’s about twice the amount needed to hold the entire Library of Congress. He has more data stored inside Amazon’s giant cloud of
Gilad Elbaz, the founder of Factual, may be the most influential inventor in the booming world of Big Data, in which companies collect and analyse huge amounts of information.
computers. His statisticians have cleaned
campaigns. But more broadly, Factual is
first two employees in Palo Alto were Tim
and corrected data to account for things
meant for the heart of a great business of
Chklovski, with a doctorate from MIT in
like how different health departments
our age: using all the cloud-based data
artificial intelligence, and Tyler Bell, who
score sanitation, whether the term “middle
and algorithms to find patterns in nature
worked at Yahoo on maps after a decade at
school” means two years or three in a
and society, for scientists to observe and
Oxford piecing together how ancient Rome
particular town, and whether there were
businesses to exploit.
became early Europe.
revisions between an original piece of data
“Data has always been seen as just a side
Part of the difficulty, even among
effect in computing, something you look up
employees, is deciding how much data is
while you are doing work,” Elbaz says. “We
enough. “For sure, we want the correct
room with a few tables and walled with
see it as a whole separate layer that everyone
name and location of every gas station on
whiteboards, is to build the world’s
is going to have to tap into, data you want
the globe,” Bell says. “Not the price changes
chief reference point for thousands of
to solve a problem, but that you might not
at every station.”
interconnected supercomputing clouds.
have yourself, and completely reliable.”
and its duplicate. Factual’s plan, outlined in a big orange
The digital world is expected to hold a
Financed with $27 million by a
“Wait a minute, I’d like to know every gallon of gasoline that flows around the
collective 2.7 zettabytes of data by year-
constellation of Silicon Valley luminaries,
world,” Chklovski cuts in. “That might take
end, an amount roughly equivalent to 700
Factual remains closely held. But it already
us 20 years, but it would be interesting.”
billion DVDs. Factual, which now has 50
has thousands of customers. Facebook,
At most startups, talk about doing the
employees, could prove immensely valuable
CitySearch, AT&T and others use it for
same kind of thing, only bigger and better,
as this world grows and these databases
information about places. Newsweek
20 years from now might seem like a
begin to interact.
used the database to help rank America’s
marriage of the delusional and the dull.
Elbaz and his team, however, say they feel
Factual sells data to corporations and independent software developers on a
Others use Factual data for tasks like
that it makes sense. Telling everyone the
sliding scale, based on how much the
product planning and customer care.
true facts of the world is at least the work of
information is used. Small data feeds
There are no profits yet, as Elbaz puts
for things like prototypes are free; contracts
money into more data sets and talent,
with its biggest customers run into the
which already includes advanced
to get more personal data,’’ Elbaz says. He
millions. Sometimes, Factual trades
mathematicians, data scientists from
doesn’t mean names and addresses, but
data with other companies, building
LinkedIn and Google, and at least one
their genetic information, what they ate,
specialist in late Roman archaeology.
when and where they exercised – ideally, for
Some current uses are for adding
Factual also has offices in Shanghai and
“Lately, I’ve been thinking that we need
everyone on the planet, now and forever.
information like restaurant locations to
in Palo Alto, California, where Elbaz wants
“I want to figure out a way,” he says, “to get
cellphone maps, or for planning sales
to add more talent from Silicon Valley. His
people to leave their data to science.” n Portfolio
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Observer O N E 2 W AT C H TExT: HildA d’sOuzA
Donald Thompson McDonald’s Corporation has selected its president and COO, Donald Thompson, as its chief executive officer effective 1 July. Thompson takes over from 67-year-old Jim Skinner, whose nearly eight years leadership as CEO catapulted US-based McDonald’s into the world’s biggest hamburger fast food chain. With his “Plan to Win” strategy, Skinner turned the company around from falling stocks that were below $13 in 2003 to soaring four-fold in value. In February this year McDonald recorded its 106th consecutive month of positive growth and saw its stocks climb more than 200 per cent and eclipse $100 a share in late December last year. Although Thompson, 48, takes the reins at a point where the burger giant is basking in nearly nine years of global sales growth, there are a number of challenges that he needs to watch closely. These include soaring commodity costs, a strong US dollar, and maintaining McDonald’s high growth rate. The 22-year veteran is expected to bring extra value with his years of experience. The outgoing CEO has expressed his enthusiasm saying Thompson is “a very talented executive for McDonald’s, a very bright individual who’s been around 22 years and has held many jobs that have allowed him to contribute great value to the systems, including COO and president. He’s the real deal.” Analysts are eager to find out how Thompson will see through McDonald’s expansion plans. These include investing $2.6 billion this year to open another 1,300 outlets worldwide, including nearly 175 in the US, 250 across Europe and 250 in China. Morningstar analyst RJ Hottovy says, “I’m curious to see how he can take the success and apply it to other parts of the business, and how well he navigates international growth, which will probably be his legacy.”
Fears About Arctic Gold Rush Lloyd’s of London, the world’s biggest insurer, has become the first major business organisation to highlight the huge potential environmental damage from drilling for oil in the Arctic. The City of London institution estimates that $100 billion of new investment is heading for the far north over the next decade, but believes cleaning up any oil spill in the Arctic, particularly in ice-covered areas, would present “multiple obstacles, which together constitute a unique and hard-to-manage risk”. The far north has become a centre of commercial attention
as global temperatures rise, causing ice to melt in a region that could hold up to a quarter of the world’s remaining hydrocarbon reserves. Cairn Energy and Shell are among the oil companies that have either started or are planning new wells off the coasts of places such as Greenland and Canada, while Total wants to develop the Shtokman field off Russia. Shtokman is the largest single potential offshore Arctic project, 350 miles into the Russian-controlled part of the Barents Sea, where investment could reach $50 billion. A BP joint venture is planning to spend up to $10 billion on developing onshore oilfields in the Yamal-Nenets Autonomous Area of Russia, despite its experiences with the Macondo oil spill in the relatively benign waters of the Gulf of Mexico. A series of onshore mining schemes are also planned, with Lakshmi Mittal, Britain’s richest man, wanting to develop a new opencast mine 300 miles inside the Arctic Circle. The Arctic’s vulnerable environment, unpredictable climate and lack of a precedent on which to base cost assessments have led some environmental NGOs to argue that no compensation would be worth the risk of allowing drilling in pristine offshore areas. Portfolio
Observer Disney Magic for China Walt Disney is joining an initiative to develop China’s animation industry, marking the latest push by Hollywood to expand into the world’s most populous country. the agreement unites the Burbank entertainment giant with an animation arm of China’s ministry of Culture and China’s largest internet company, tencent Holdings. getty images
China’s government has identified animation as a key area for development to boost the country’s global influence, or “soft power”. Disney’s China partnership echoes DreamWorks animation’s announcement of a joint venture with shanghai media group, China’s second-largest media company, to build a family
getting a dedicated television channel approved in the country, considered a vital part of its marketing strategy. many studios and independent film producers and distributors
entertainment company to produce animated and live action
are hoping to capitalise on a recently negotiated trade
movies and tV shows for the Chinese market.
agreement with China that significantly eased restrictions on
Disney is currently building its first theme park in mainland
distributing movies in the country. the accord increases the
China, a $3.7-billion attraction in shanghai slated to open
number of foreign movies allowed into China under its current
in 2015. the company also operates a network of english-
quota system and gives foreign studios a larger slice of box-
language schools in China. Disney has had less success
US Gets Greener
shift is cutting US carbon dioxide emissions, something that international negotiations and legislation couldn’t achieve. The shift to gas, combined with state programmes to encourage renewable energy and new rules from the Environmental Protection Agency, has put the country on course to cut domestic greenhouse-gas emissions 12 per cent by 2020, on par with what the failed cap-and-trade legislation aimed to achieve. Carbon emissions from energy in the US, the largest source after China, probably will stay below the record level of six billion metric tonnes set in 2007 for the next 23 years, the US Energy Information Administration predicted 23 January, the first time it forecast a long-term reduction. With the increased use of natural gas in the US, the Energy
Information Administration predicts that in 2035, carbondioxide emissions will total 5.8 billion metric tonnes, a cut of eight per cent from a forecast made last year. That’s also down 40 per cent from the prediction made in 2005, before the recession. Fracking, a method of extracting gas from previously
New auto standards will cut emissions by a further six per cent
commercially unviable fields through hydraulic fracturing, has
or more in 2035.
opened up vast new shale-gas deposits and boosted the US’
The story in the US is in contrast to China, India, Mexico and
natural gas production. This has caused a steep decline in prices,
Russia, where demand for carbon-dependent cars and electricity
making gas more attractive than coal for energy generation. This
Observer The World
TExT: HildA d’sOuzA
Iceland Could Power Britain
HigHEsT BirTH rATE By COuNTry Rank 1. 2. 3. 4. 5. 6. 7. 8. 9. 10.
Country Niger Uganda mali Zambia Burkina Faso ethiopia angola somalia Burundi malawi
Births/1,000 population 50.54 47.49 45.62 44.08 43.59 42.99 42.91 42.71 41.01 40.85
soURCe: Cia WoRlD FaCtBooKs (2011 estimates)
The British energy minister, Charles Hendry, is to visit Iceland this month (May) to discuss connecting the UK to its abundant geothermal energy. “We are in active discussions with the Icelandic
HigHEsT lifE ExpECTANCy AT BirTH Rank
1. 2. 3. 4. 5. 6. 7. 8. 9. 10.
monaco macau san marino andorra Japan guernsey singapore Hong Kong australia italy
Ages in Years 89.7 84.4 83.0 82.4 82.2 82.1 82.1 82.0 81.8 81.7
soURCe: Cia WoRlD FaCtBooKs (2011 estimates)
government and they are very keen,” said Hendry. To reach Iceland, which sits over a mid-ocean split in the Earth’s crust, the cable would have to be 1,000 to 1,500 kilometres long and by far the longest in the world. Hendry has already met the head of Iceland’s national grid about the plan. The web of sea-floor cables – called interconnectors – planned for the next decade would link the UK to a Europe-wide supergrid, which is backed by the prime minister. The supergrid would combine the wind and wave power of northern Europe with solar projects, such as Desertec in southern Europe and North Africa, to deliver reliable, clean energy to meet climate change targets and reduce dependence on fossil
lOWEsT OvErAll lifE ExpECTANCy AT BirTH Rank 1. 2. 3. 4. 5. 6. 7. 8. 9. 10.
Country angola afghanistan Nigeria Chad swaziland guinea-Bissau south africa Zimbabwe Central african Republic somalia
soURCe: Cia WoRlD FaCtBooKs (2011 estimates)
Ages in Years 38.7 45.0 47.5 48.3 48.6 48.7 49.3 49.6 50.0 50.4
fuel imports. The government’s legally binding targets to reduce carbon emissions are a key driver for the new interconnectors, which if all built could supply a third of the nation’s average electricity demand. Interconnector cables can be laid very rapidly – at over 30 kilometres a day – but remain significant engineering projects, with each kilometre containing 800 tonnes of copper. The UK has been energy independent for virtually its entire history. But with the North Sea’s oil and gas failing and coal banned as too polluting, the country will soon become dependent on imported energy Portfolio
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The End of Printed Encyclopaedias AFTER 244 YEARS, THE
Wikipedia also regularly meets the 21st-century mandate of providing
Wikipedia made an average of four errors
instantly updated material. And it has
in each article, and Britannica three.
nearly four million articles in English,
Britannica responded with a lengthy
age – and of competition from the website
including some on pop culture topics
rebuttal saying the study was error-laden
Wikipedia – Encyclopaedia Britannica will
that would not be considered worthy of a
and “completely without merit”.
focus primarily on its online encyclopaedias
mention in the Encyclopaedia Britannica.
Acknowledging the realities of the digital
and educational curriculum for schools. The
Cauz said that he believed Britannica’s
The Britannica, the oldest continuously published encyclopaedia in the English
last print version is the 32-volume 2010
competitive advantage over Wikipedia
language, has become a luxury item with
edition, which weighs 58.5 kilograms and
came from its prestigious sources, its
a $1,395 price tag. Only 8,000 sets of
includes new entries on global warming and
carefully edited entries and the trust that
the 2010 edition have been sold, and the
the Human Genome Project.
was tied to the brand.
remaining 4,000 have been stored in a warehouse until they are bought.
“It’s a rite of passage in this new era,”
Sales of the Britannica peaked in 1990,
Jorge Cauz, the president of Encyclopaedia Britannica, said in an interview. “Some
when 120,000 sets were sold in the United
people will feel nostalgic about it. But
States. But now print encyclopaedias
we have a better tool now. The website
account for less than one per cent of the
is continuously updated, it’s much more
Britannica’s revenue. About 85 per cent
expansive and it has multimedia.”
of revenue comes from selling curriculum
In the 1950s, having the Encyclopaedia
products in subjects like math, science and
Britannica on the bookshelf was akin to a
the English language. A further 15 per cent
station wagon in the garage, a possession
comes from the half a million households
coveted for its usefulness and as a
that pay a $70 annual fee for the online subscription, which includes access to the
goalpost for an aspirational middle class. Buying a set was often a financial stretch, and many families had to pay for it in monthly instalments. But in recent years, print reference books have been almost
The last print version of the Encyclopaedia Britannica was the 32-volume 2010 edition, which only sold 8,000 sets. The print version accounts for less than one per cent of Britannica’s revenue.
its vast spread of resources, including
full database of articles, videos, original documents and to the company’s mobile applications. Gary Marchionini, the dean of the School of Information and Library Science at the
completely overtaken by the internet and “We have very different value
University of North Carolina at Chapel Hill,
specialised websites and the hugely
propositions,” Cauz said. “Britannica is
said the fading of print encyclopaedias was
popular – and free – online encyclopaedia
going to be smaller. We cannot deal with
“an inexorable trend that will continue.”
every single cartoon character; we cannot
“There’s more comprehensive material
deal with the love life of every celebrity. But
available on the web,” Marchionini
Wikipedia has moved a long way toward
we need to have an alternative where facts
said. “The thing that you get from an
replacing the authority of experts with
really matter. Britannica won’t be as large,
encyclopaedia is one of the best scholars
the wisdom of crowds. The site is now
but it will always be factually correct.”
in the world writing a description of that
Since it was started 11 years ago, © 2012 NEW YORK TIMES NEWS SERVICE
said that out of 42 competing entries,
Encyclopaedia Britannica is going out
written and edited by tens of thousands
But one widely publicised study,
phenomenon or that object, but you’re still
of contributors, and even academics have
published in 2005 by Nature, called into
getting just one point of view. Anything
gradually accepted it as a largely accurate
question Britannica’s presumed accuracy
worth discussing in life is worth getting
and comprehensive source.
advantage over Wikipedia. The study
more than one point of view.” n Portfolio
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The Power of Money Economist Larry Summers has a CV that includes being the President of Harvard to Treasury Secretary under the Clinton Administration and President Obama’s Chief Economic Advisor. But now that he’s left government there is one thing that really excites him – the role of technology in economics. And the best place to explore that is Silicon Valley, reports Guido Duken.
Lawrence Summers is a man who knows about money. In fact, one could argue that he was genetically programmed that way as his parents, Robert and Anita Summers, are both economics professors. Not to mention that two of his uncles,
2001, Summers returned to Harvard as
Paul Samuelson and Kenneth Arrow, are
the institution’s president until resigning
both Nobel laureates in economics.
However, when the 16-year-old
In 2009, Summers joined the National
Krugman and Joseph Stiglitz. Summers also pushed through controversial banking reforms in the US. As Bill Clinton’s Deputy Treasury
Summers entered the Massachusetts
Economic Council, eventually serving as
Secretary he endorsed the Gramm-Leach-
Institute of Technology (MIT), he originally
President Obama’s Chief Economic Advisor
Bliley Act that paved the way for massive
intended to study physics. But it didn’t take
before leaving in December 2010. In those
consolidation in the financial-services
long for him to see the light. “I wasn’t any
two years he exercised maximum sway
industry and removed the separation
good at math or physics,” said Summers,
over US economic policy during the worst
between investment and commercial
“so I became an economist.” It marked the
economic crisis since the Great Depression.
banks. “Today, Congress voted to update
beginning of a meteoric career.
the rules that have governed financial LIKE EVERY Washington insider,
services since the Great Depression
one of the youngest tenured professors in
especially those who hold or have held top
and replace them with a system for
Harvard’s history. In 1991, he served as the
positions, he has received both praise and
the 21st century,” Summers said. “This
World Bank’s chief economist for two years.
criticism. Supporters praise him for his
historic legislation will better enable
In 1993, Summers received the famed John
strong points-of-view, while his detractors
American companies to compete in the
Bates Clark Medal, which is given to the
label it intellectual bullying.
new economy.” Many critics, including
In 1983, at age 28, Summers became
top economist under 40 and is regarded
During the Asian financial crisis in
President Barack Obama, have suggested
as a stepping stone to the Nobel Prize.
the ’90s some publications compared
the 2007 subprime mortgage financial
That same year, President Bill Clinton
Summers to General MacArthur for
crisis was caused by the Gramm-Leach-
named him as Treasury Undersecretary
the way he pushed banking reform
Bliley Act that created the “too-big-to-fail”
for International Affairs, which meant
onto various countries. He was deeply
financial institutions that were publicly
he was the US’s top financial diplomat.
involved in the Clinton Administration’s
Euromoney called him “the most ambitious
effort to bail out Mexico and Russia
Harvard professor to come to Washington
when those nations had currency crises.
endorsed the deregulation of financial
since Henry Kissinger.”
Summers encouraged then-Russian leader
derivatives, saying at the time that the
Boris Yeltsin to use the same “three-
big banks were “eminently capable of
Treasury Secretary and took the top post
‘ations’” of policy he advocated in the
protecting themselves from fraud and
four years later. During his two-year
Clinton Administration – “privatisation,
counterparty insolvencies.” Those same
tenure as Treasury Secretary, Summers
stabilisation, and liberalisation.” He also
derivatives played a central role in the
used budget surpluses to repurchase
pressured the Korean government to raise
financial crisis, leading them to be dubbed
Treasury debt and pay down the deficit,
its interest rates and balance its budget in
as “financial weapons of mass destruction”
which hadn’t happened since the 1920s.
the midst of a recession, a move criticised
by Warren Buffett. On 18 April 2010,
When President Clinton’s term ended in
by renowned economists such as Paul
in an interview on ABC’s This Week
In 1995, Summers became Deputy
As Treasury Secretary, Summers also
programme, Clinton said Summers was
was reasonable to expect that the subprime
Timothy Geithner led marathon
wrong in the advice he gave him not to
credit crisis would be a financially
discussions with other Obama economic
significant event but not one that would
advisers over how to restructure the
threaten the overall pattern of economic
financial rescue to demand more
contemporaries in recognising that the US
growth. This is still a possible outcome but
accountability from banks in how they
subprime mortgage crisis could very well
no longer the preponderant probability.”
used bailout money. The two plotted to
Still, Summers was ahead of his
lead to a recession. In November 2007,
During the presidential transition in
Summers warned: “Three months ago it
2008, Summers and Treasury Secretary
try using government funds to reduce the number of home foreclosures. And they designed the outlines of an $800 billion
Summers served as Director of the National Economic Council in the Obama Administration from January 2009 to December 2010.
stimulus package comprised of tax cuts and vast new spending in a range of areas. In February 2009, Summers quoted John Maynard Keynes, saying: “When circumstances change, I change my opinion”, reflecting both on the failures of Wall Street deregulation and his new leadership role in the government bailout. Although Summers had endorsed the Gramm-Leach-Bliley Act, he now took a leading role in revamping financial regulation, which was shepherded through Congress by Senators Christopher Dodd and Barney Frank. The bill allowed for the orderly dissolution of big financial institutions whose destruction would threaten the entire US economy at no cost to taxpayers; for the first time, the derivatives market was regulated, which was blamed for helping cause the 2008 financial meltdown; it created a financial council overseen by the Treasury Department to coordinate and monitor risk in the financial markets; and created an independent consumer watchdog inside the Federal Reserve to give US
In February 2009, Summers quoted John Maynard Keynes, saying: “When circumstances change, I change my opinion”, reflecting both on the failures of Wall Street deregulation and his new leadership role in the government bailout. May 2012
“Look, I think that for too long, financial innovation has been about big, rich institutions. Square’s innovation is fundamentally about making it easy for a piano teacher or tutor to get paid, or reducing the friction involved in using a car service.”
technology.” He later singled out e-commerce as a particularly important segment. “The penetration of e-commerce and the movement toward IT platforms of commerce is going to have a larger and larger impact on the real economy, simply because high percentage rates from a substantial base make more difference
and a store of value, and I think it always
Institutions can change what they hold,
than high percentage rates from a very
has been,” he told Technology Review.
they can change their risk profiles much
“It’s been a long, long time since most of
more quickly than they used to be able to,
the money was hard currency; most of
and that means they need to be watched
SQUARE IS a rising mobile payments
the money has been deposits in a bank
more quickly. It also means that we may
company based in San Francisco that not
of one kind or other. I think many of the
not be able to focus quite as much on what
only facilitates credit card transactions on
basic principles underlying money that
their risk profile is at a particular instant,
mobile devices, but is chasing an aggressive
economists understand – that if you create
as we focus on what their systems are for
goal to replace credit cards altogether. Its
too much of it you will get rising prices,
managing risk. But there’s no question that
this kind of innovation that stirs both the
for example – actually are constant even
risk management is going to be one of the
economist and technologist in Summers’
as technology does change.”
growth areas for the next decade or two.”
Summers believes that technology has
heart. In a recent interview, he outlined
There’s one thing Summers won’t be
his motivation for joining the startup. “I
accelerated the flow of money around
doing in Silicon Valley, and that’s giving
was excited,” said Summers. “Look, I think
the world and that requires a different
one of his Harvard lectures. “I am not sure
that for too long, financial innovation
approach to regulations. “I think we need
there is the attention span for some of my
has been about big, rich institutions.
a system that’s as modern as the markets.
lectures out there,” he joked. n
Square’s innovation is fundamentally about making it easy for a piano teacher or tutor to get paid, or reducing the friction involved in using a car service. I was excited about the idea of financial innovation for the benefit of regular people. I thought they had an exciting product and the prospect of getting to a very substantial scale quite quickly.” But doing away with credit cards will put Square on a collision course with some major financial institutions. And that’s where someone with Summers’ knowledge and influence will prove ultra useful. At Andreessen Horowitz, Summers works with venture capitalists Marc Andreessen, Ben Horowitz and their partners, as well as with their start-ups, to advise them on global markets and on economic thinking. The firm has an investment philosophy that already appealed to Summers while he was Treasury Secretary. “They have an audacity of vision and really support transformation.” Even as technology transforms the way nature of money remains basically the same. “Money is a medium of exchange
we do business, Summers believes the
Summers with Ben Bernanke, Chairman of The Board of Governors of the US Fedral Reserve. Summers changed his viewpoint to support more financial regulations.
ProPerty Market reveals a DiviDeD Britain In central London, the value of millionairesâ€™ houses is rising even faster than expected. In Hartlepool, itâ€™s a different story, reports Hilary Osborne. Portfolio
“It Is a frenzy out there,” says
Humberts. “There’s a reasonably
Tracy Kellett, a buying agent who searches
responsible government, the fiscal plan
London and the south-east for properties
does seem to be working, we have a very
for her well-off clients. “I said prime
transparent legal system when it comes to
London would go up five per cent this year,
property, we fare well on transaction costs
but I think it is already up that much.”
– and, of course, you can set up a tax-free
Almost five years after the first stirrings of the credit crisis, Britain’s housing market
These are not the kind of investors you
is deeply divided. The price crash that many
see elsewhere in the UK: they do not need
analysts had predicted failed to materialise;
income, just a safe place for their capital.
but while Kellett struggles to find enough
They will typically stay in the property for a
properties to sate the appetites of wealthy
few weeks each year, and leave it empty the
buyers in the capital, much of the rest of the
rest of the time. The hassle of dealing with
country remains deep in the doldrums.
tenants is not for them.
“There is definitely a London story versus
buyers, Nurmohamed says he is seeing
has done better over the last year or so
existing clients snapping up properties
while many parts of the country have seen
for their extended family – in one block
prices fall,” says Martin Ellis of Halifax.
in Mayfair, the same family owns four
Kellett recently viewed a two-bed
multimillion-pound apartments. “We
property at £1.25 million. After 80 viewings
do have buyers on our books who are
in two days, it has attracted bids of more
looking specifically to add to that prime
than £1.6 million, and the agent has
holiday home.” Taylor says he has seen clients “buying
many of her clients are searching – £1
second, third, fourth, fifth and sixth
million to £2 million – she says the market
properties – they buy one for them and
then one for the kids.” Recently he had a call on behalf of a buyer asking if he had
Kensington and Chelsea, Mayfair or
any houses for sale for £30 million. “I had
Knightsbridge – neighbourhoods in
one at £50 million, so I said is there room
London that are central, boast some of the
for movement, and they said no – the other
capital’s swankiest shops and restaurants
children had £30 million spent on their
and, say agents, have developed some
properties, so it wouldn’t be fair.”
cachet abroad thanks to their association with Princess Diana. According to the Land Registry, prices
The properties Adams is currently selling cost an average of £12 million, but he has one on the market for £120 million. At
in these areas are up by nine per cent
the bottom end of his book, at around £1.5
year-on-year. The average is still below
million, your money could get you a two-
£1 million, but there are many for sale for
bedroom pied-a-terre in a location such
much, much more.
as Kensington or Chelsea with no garden.
Wealthy British buyers are vying with
C The Observer
David Adams of estate agents John
cash offers. In the price bracket where
Most of these properties are in
As well as money coming in from new
the rest of the country. It is London which
advised that the seller will only consider
Property prices in London are up nine per cent year-on-year, but the picture is different for the rest of the UK.
vehicle to hold the property.”
Higher up the market, things are much
overseas investors who see sterling as a
more luxurious, with bespoke bathrooms,
safe haven during the euro crisis. “London
kitchens and spa rooms. If you have £30
offers a unique mix of attributes that
million or so to spare, you may even get
few other places in the world have,” says
great views alongside your state-of-the-art
Mohamed Nurmohamed, director of the
security and valet parking.
Mayfair branch of estate agents Chesterton
But money doesn’t always secure your
A woman looks at properties for sale at an estate agent in central London. In the capital it is a seller’s market.
heart’s desire. Nurmohamed says: “In Mayfair we’ve had people with £30 million who can’t get what they want.” This is a market where the seller is king – or often minor royalty – and to even get in to the most expensive properties to take a look, you may need to show your
“In some, very rare, cases people will prevent viewings unless they have evidence that the person can perform.”
credentials. “In some, very rare, cases people will prevent viewings unless they
Property Auction. Hartlepool saw house prices fall by 17 per cent in 2011, and despite a 0.5 per cent rise in January they remain at an average of just £78,623, compared with a peak of £113,352 in 2008. During the boom years, between 150 and 200 homes a month were selling, but since the end of 2008 that
Across the road, Eden Estates is
figure has only once hit 100, according to
have evidence that the person can perform,”
marketing homes at a guide price, and
the Land Registry – and some properties
properties are being advertised for as
have been on the market for all of that time.
little as £10,000 in the Great North
Ellis at Halifax says the city is by no
two hundred and fifty miles away, the story is very different in Hartlepool, whose fortunes seem to sum up commentators’ talk of a two-track British housing market. The north-eastern town is struggling with rising unemployment as a result of public sector cuts and the loss of manufacturing jobs. On York Road, one of the main streets running through the town, the blinds are down at the huge branch of Whitegates estate agents, which closed two years ago. Further up the road, the window reading for sellers: at least one in three properties advertised has been reduced and on one, buyers are told: “All serious offers considered”.
£30 million doesn’t guarantee that a buyer will get what he wants in exclusive areas such as St James.
of Robinsons estate agents makes grim
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means alone. “Although Hartlepool may be at the extreme, there are other places that have also seen steep drops, in the northeast and across northern England.” Ed Stansfield, property economist at consultancy Capital Economics, says that while the downturn in the London market was short-lived, the correction is by no means over in much of the rest of the country. “When you talk to people outside London, they say it’s still going on,” he says. The Hartlepool branch of Manners & Harrison is buzzing with phone calls and activity, but manager Sharon Richardson admits things have been difficult. She says: “I’ve been in the business 20 years and it’s one of the hardest years I’ve done.” One of the challenges has been educating sellers about what to expect. “They come in and
In the seaside town of Hartlepool real estate prices are still dropping and it can take years to find a buyer.
say, ‘I saw on television, house prices are on the up’, and we say, ‘they’re not on the up in Hartlepool, our prices are still falling’.” As with the UK as a whole there are pockets that seem to be driving down the average. One terraced house in the centre sold for just £20,000 last year, and there are many others on the market for less than £30,000. “First-time buyers are not interested in the town-centre terraces for the simple reason that investors buy them and they tenant them,” says Kay Rhodes, branch manager for estate agent Reeds Rains. A price war between landlords has driven rents down, she says, leading to tenants who don’t value the properties as much. “Those who remain as owner-occupiers
In the Hartlepool town centre prices are being slashed for small, terraced houses.
Meanwhile, builders are still constructing
Seaton Carew on the outskirts of town. He
will cut their losses and go – and they will
new homes. Just across the road, the
put the property on the market last Easter
probably sell to an investor.”
Blakelock Gardens development has three-
because his family wanted a home with
bedroom homes with en-suites, gardens
a bigger garden. By September he’d had
road of 54 small terraced houses where
and off-street parking starting at £104,950.
“minimal interest” and just three viewings,
three are to let, two are for sale by an agent
It’s easy to see why would-be buyers might
so he switched estate agent and reduced his
and one boarded-up property is for sale by
decide to sit tight until they can afford one
asking price from £209,950 to £205,950.
auction. According to the website Property
One of these streets is Rydal Street, a
Bee, one has been on the market since
In Hartlepool, buyers hold the cards:
But it took another price cut, to £185,950, before he got an offer – and that
2008, while another, on since 2011, has had
Richardson says some sellers accept cheeky
was £10,000 below asking price. But the
its price cut from £59,950 to £47,950. They
offers “because they are worried another
slow market has worked in his favour on
are the kind of homes that, in other towns,
buyer won’t come along”.
the purchase: the sellers of the home his
might be lived in by students, but there is no university here to supply that kind of tenant.
Lee Brown has just accepted an offer after 11 months of trying to sell his house in
family fell in love with accepted a lower offer than originally agreed. n Portfolio
Chinaâ€™s seCretive teCh Giant Huawei, Chinaâ€™s biggest exporter, has lofty ambitions. But if it wants to crack the global market it may have to learn to be a bit more open, reports Juliette Garside. Portfolio
people’s republic, Huawei is headed by a
RIM and Taiwan’s HTC. To succeed, it will
former Red Army engineer, Ren Zhengfei.
have to redefine what “Made in China”
Unlike other Chinese IT firms, such as the PC maker Lenovo and telecoms
is the electronics workshop of the world,
Hong Kong stock exchange. A private
churning out iPhones for Apple and PCs
company owned entirely by its founders
for Dell, its produce usually bears the
and employees, the names of its board
stamp of a foreign company. Aside from
members were only published for the first
PC maker Lenovo, it is hard to name a
time last year.
Chinese brand known to European and
But it is also a flagbearer for China’s
by economic liberalisation in the
the quality is no good,” says Francisco
1980s to compete on the world stage.
Jeronimo, an analyst at research firm IDC.
Entrepreneurial and unbureaucratic, it
“Huawei needs to change that perception.”
It sells everything from mobile mast
Jeronimo believes Huawei products have the quality to compete, but says it will need to raise its public profile. The charge will
radios to software, data-centres and laptop
be led from the UK, where no expense has
dongles. Founded in 1987, Huawei only
been spared in recruiting British executives
began exporting in earnest in 2000, but
and an advisory board to help find friends
already over 65 per cent of its revenues are
in high places.
from abroad. Last year, they totalled 185.2 Getty iMaGes
“Consumer perception is that a Chinese product is cheap and looks cheap because
billion yuan (£18.51 billion), just half a billion pounds less than the world’s largest telecoms equipment group, Ericsson. Now Huawei is preparing to step out of
© 2012 Guardian news & Media
first generation of corporations created
has prospered without having the state as
The securiTy guard’s mirrored
the shadows. While its governance remains
sunglasses reflect Barcelona’s pale winter
veiled, the company is pushing its brand
sunshine. His job is to keep the crowds
to the fore. It wants to place its products
attending the sprawling trade fair at bay.
in the hands of millions of western
Behind him, a pavilion the size of
consumers, and become the fourth largest
a bus garage houses the latest technology
manufacturer of smartphones by the end
produced by China’s Huawei. Those
of this year.
without a meeting to attend are told
While Huawei’s hometown of Shenzhen
group ZTE, Huawei is not listed on the
“going out” policy of encouraging the
Engineers test networking equipment at the Huawei Technologies campus in Shenzhen, China. The company employs 140,000 staff.
At the Mobile World Congress in
“Now Huawei is preparing to step out of the shadows. While its governance remains veiled, the company is pushing its brand to the fore.” Patience Wheatcroft, the former editor of the London-based Sunday Telegraph is an
they cannot enter, and cameras are
Barcelona this February, Huawei’s devices
adviser, as is Amazon’s ex-UK boss Brian
chairman Richard Yu said that by the end
McBride, and Sir Andrew Cahn, recently
Huawei is China’s biggest exporter, and
of 2012 he hoped to have sold 60 million
chief executive of UK Trade & Investment,
its equipment helps run the BT broadband
smartphones, up from 17 million last year.
the government trade promotion body. To
network, but the brand is unknown to
Hitting that target would vault the firm
promote the smartphones, Bartle Bogle
most UK households. Regarded as a
into the big league, behind Apple, Samsung
Hegarty, ad agency to Google and BA, will
secretive organisation even within the
and Nokia, and ahead of BlackBerry maker
create a global campaign from London.
Samsung has shown it can be done. The Korean company moved from fifth to second spot globally in smartphone sales last year, the only one in the top five to grow in the face of the unstoppable iPhone. There are those who wonder why Huawei is so keen to risk its hard-earned yuans by chasing capricious mobile phone customers. The answer is that this is a high-growth market. Even in an early adopter nation like the UK, only half of users have a smartphone. And the handset market has the attraction of being a less
Former Chinese Premier Wen Jiabao (L) with Ren Zhengfei, the CEO of Huawei Technologies.
politically sensitive one than infrastructure.
The Huawei Ascend P1 S, unveiled in January, is claimed to be the world’s thinnest smartphone at 6.68mm.
huawei is already big in Europe, having last year won a breakthrough contract to overhaul the network of the UK’s largest operator, Everything Everywhere. But an offer to donate £50 million of equipment to bring a mobile signal into the London Underground in time for the Olympics was never taken up. A spokesman for Huawei says the deal fell apart not because of security fears, but because commercial agreement could not be reached between all the various players involved. Bengt Nordstrom, a strategic adviser to European mobile networks, says Huawei has succeeded because of its ability to learn
fast. “Ten years ago they were really only
The Huawei pavilion at Barcelona was huge, but entry was invitation only. A lack of transparency is challenging the company’s expansion plans, especially in the US.
selling on low prices,” says Nordstrom. “It was hard to find people that could speak English well enough to conduct a business discussion. But for every quotation they produced, their quality increased.”
“It’s imperative we are seen as a global
can’ and ‘splendid act’, designed its quad
brand and not a Chinese brand,” says Mark
core processors in house and has become
Mitchinson, a Samsung veteran running
known in recent years for innovating. Some
the China Development Bank, the pattern
Huawei’s UK devices arm.
62,000 of its 140,000 staff work in research
of Huawei’s international expansion has
and development, and there are 23 R&D
followed its philosophy, borrowed from
centres around the world.
Chairman Mao, of encircling the cities by
His newest stock are phones and tablet computers running Google’s Android interface, which house computer chips
Without a recognised brand, Huawei’s
Backed by a $30 billion credit line from
winning the countryside. Beginning in Africa and Russia, it has
that have four rather than the now usual
phones will sell on price. Its mission will
two processors, allowing them to handle
be to mop up those mobile subscribers who
moved successfully west. Only America
multiple instructions at the same time.
don’t yet own a smartphone, rather than
has blocked its advance. Efforts to expand
They are fast, particularly when it comes to
trying to poach Apple’s customers.
have been repeatedly neutralised by
“There are certain manufacturers that
Washington. Offers to acquire Motorola’s
have dropped the ball over recent years and
wireless division and a broadband
to leave chips to specialists like Intel,
others can pick up that ball and run with
software group were quashed after the
Huawei, whose name stands for ‘China
it,” says Mitchinson.
sellers were informed that regulatory
While most phone makers prefer
in October, the company he founded is facing a succession crisis. In her letter published in last year’s annual report, Huawei’s charismatic chairwoman, Sun Yafang, thanked the staff for re-electing her, saying: “I am sincerely grateful to our employees’ trust and confidence in me.” It was a short statement that masked an internal power struggle. While Ren, who does not give interviews, has been criticised in the Chinese press for a lack of transparency, Sun is increasingly being seen as Huawei’s public face, a networker who was among corporate China’s most senior representatives at Davos this year. But in October 2010, a report in Meiri Jingi Xinwen (Daily Economic News) suggested Sun had been offered one billion Getty iMaGes
yuan to leave Huawei so that Ren could prepare the ground for the appointment
Huawei has 62,000 staff working in 23 R&D centres around the world.
to the 13-member board of his son, Meng Ping, who is customer relationship
approval would not be forthcoming. A
they know they could get if they opened up
management director. The company denies
contract to modernise mobile operator
their equipment market to them.”
this. Whatever the truth, Sun survived in a
Sprint Nextel’s network was squashed,
Huawei’s stated ambition is to become as
post she has held since 1999 and Meng did not join the board.
and the US commerce department last
big as Cisco or IBM, with annual revenues
autumn barred Huawei from an emergency
of $100 billion in 10 years. Nordstrom
services contract. A British executive
says this is unlikely without conquering
Huawei; Ren’s daughter Meng Wanzhou
whose company buys from Huawei says US
America: “This is an industry where you
is chief financial officer. According to a
politicians are using espionage as a scare
need to be truly global to have a future.”
report in Zhengquan Ribao (Securities
tactic to protect domestic businesses. “What the Americans are really trying to do is stop Huawei getting the business
But the Ren dynasty holds sway at
Observers say the most serious threat
Daily) from April 2011, she is married to
to Huawei’s ambitions comes from within.
fellow director Xu Wenwei, although the
As Ren approaches his 68th birthday
company denied this. Meanwhile, Ren Shulu, the founder’s younger brother, is a member of the five-strong supervisory board that oversees the directors. Succession is not just an issue at Huawei. China’s first generation of entrepreneurs at Lenovo and white goods maker Haier are also nearing retirement. “These companies’ futures hinge on how effectively the incumbents manage leadership transitions. Indeed, the choices the founder CEOs make may well reshape their companies as well as the Chinese economy,” says Liu. Ren has resisted a stock exchange listing,
but ownership could help shed light on the business and build trust. Huawei may Wan Biao, chief executive officer of Huawei, at a product launch Beijing. The company is betting its cloud-computing smartphones will help the firm grab market share. May 2012
have to open its own doors before America decides to do the same. n
AFRICA’S GROWING AMBITION The continent’s GDP is growing at five per cent and foreign investment has risen six-fold. But there are other more integral reasons why Africa’s future is looking bright, reports David Smith.
IT HAS BEEN DESCRIBED AS THE NEW scramble for Africa. The continent has awoken from the nightmare of its mid-90s civil wars. Coups and dictators appear to be going out of fashion. Now, with six of the world’s 10 fastest-growing economies, there is a growing consensus that Africa’s time has come. Africa’s GDP growth will average five per cent in the coming decade, according to Ernst & Young, with Ghana, Ethiopia and Uganda set to top seven per cent a year. Foreign direct investment, which has risen six-fold in the past decade, is forecast to reach $150 billion by 2015. There is growing confidence in Africa as an investment destination, with the highest © GUARDIAN NEWS & MEDIA 2012
returns in the world. In the World Bank’s most recent Ease of Doing Business rankings, 14 African countries ranked ahead of Russia, 16 ahead of Brazil and 17 ahead of India. But with expectation comes the potential for disappointment. The question now is can Portfolio
Africa build on the opportunity and avoid the pitfalls of the past? Some are in no doubt that the continent is in better shape this time. In April, Tony Blair, who once described Africa as a “scar on the conscience of the world”, told businessmen in London: “There is no doubt: Africa is changing for the better, the perceptions of Africa are also changing for the better. There is a new sense of hope and confidence, an optimism and an expectation that is based on evidence not dreams. “Above all, I am noticing in my frequent visits there that there is a new generation of leaders in politics, business and civic society who don’t simply have a new competence about how they approach their tasks but
Employees work in the Amingos fibre hair factory in Lagos. Nigeria is slowly diversifying away from oil.
a new attitude, a new frame of thinking, a new way of looking at their own situation.” Whereas in the past these opportunities may have been squandered, or cancelled out by a global financial crisis, it now appears that Africa is better positioned to withstand shocks. During the meltdown of 2009, while developed western economies were shrinking an average of two per cent, sub-Saharan Africa was still growing at about 3.5 per cent. Mthuli Ncube, chief economist at the African Development Bank, gave three reasons: “First, the growing domestic demand in Africa itself, the rise of a middle class, acted as a shock absorber. Second, there was improved macroeconomic management from a generation of managers who trained
BLAIR SAID the growing influence of
from $10.6 billion in 2000 to $160 billion
during the restructuring programmes of
China was another reason for optimism.
in 2011 and investment totalled $13 billion.
the early 90s. Third, African economies
Three years ago it overtook the United
have diversified: Nigeria is now not only
States as Africa’s biggest trading partner.
blind “resource colonialism”. But in his
oil but also tourism and agriculture.
China, which has a thirst for Africa’s
speech in London, Blair said: “The fact
Diversification is very helpful when there
natural resources, says bilateral trade grew
is that China has both the capital and
is a decline in commodity prices.” The bank estimates the middle class at 313 million people in 2010, 34 per cent of the continent’s population, and predicts PHOTOS ON THIS PAGE: REUTRS
Kenya’s rich and new middle classes have a growing taste for coffee and ice-cream. That’s just one sign that African states such as Kenya are changing.
it will grow to 1.1 billion (42 per cent) by 2060. There are now more than 100,000 Africans with at least $1 million to invest, according to the consultants Merrill Lynch and Capgemini. May 2012
Sceptics accuse China of a morally
“First, the growing domestic demand in Africa itself, the rise of a middle class, acted as a shock absorber. Second, there was improved macroeconomic management from a generation of managers who trained during the restructuring programmes of the early 90s.”
“The lack of economic diversification, in terms of both export products and destinations, explains the high volatility of African trade in recent years, and the strongly adverse impact of the global economic crisis through trade.”
Alexandra, a Johannesburg slum, provides a stark contrast to the affluent Sandton area in the background. But Africa’s middle class is expanding, especially in South Africa.
Ncube added. “Most trade is between Africa and the rest of the world. It will take a while to fix.” Intra-Africa trade, punished by lack of regional integration and poor infrastructure, makes up a woeful 10 per cent of total exports, compared with 60 per cent for south-east Asian countries. Such weakness led to a warning from the Africa Progress Panel, whose members include Blair, Kofi Annan and Bob Geldof. “The lack of economic diversification, in terms of both export products and destinations, explains the high volatility of African trade in recent years, and the strongly adverse impact of the global economic crisis through trade,” said the
panel in its 2011 report. “It also explains why so little of the continent’s high GDP growth translates into social development and tangible
the capacity to get things done. This is
improvements to people’s lives ... It is thus
especially true in infrastructure.
hardly surprising that, despite a decade of strong economic growth, poverty remains
“How many times do you see in Africa
pervasive throughout the continent.”
a road promised for years, that finally
Africa remains the poorest continent,
the same time as we make legitimate
with only one in four people having access
points about the methods of investment
to electricity. The experience of Angola
sometimes used, have to face up to the
and others suggests that economic growth
uncomfortable fact that this didn’t happen
may deepen, rather than reduce, the gap
between rich and poor.
HOWEVER, AS the good times roll, there is a danger of Africa becoming too dependent on exporting mineral resources and not investing in manufacturing,
is being built; and we, in the west, at
Mthuli Ncube, chief economist at the African Development Bank, believes the continent is better positioned to withstand global economic shocks.
There appears to be no causal relationship between growth and democracy and human rights. Corruption is still rife and agricultural productivity frustratingly low. These issues could Portfolio
Former British Prime Minister Tony Blair (L) shakes hands with Alphe Conde, Guinea’s president. Blair believes that Africa has undergone many positive changes.
China has launched a fund to encourage Chinese firms to invest in Africa, setting the scene for a ‘new type of strategic partnership’ not solely based on profit.
Porsche officially opened a new car dealership on 16 March in the heart of Lagos’ wealthiest district, Victoria Island, a place with one of the world’s highest concentrations of millionaires.
undermine the growth narrative.
“The common bottlenecks to doing business on the continent – excessive bureaucracy and government inefficiency - coupled with a lack of regulation in many countries mean that it will be a number of years before the potential is fully realised.”
countries mean that it will be a number of years before the potential is fully realised.”
is hoped, could be in place in three years.
senior editor/economist for Africa at the
BUT DESPITE the persistent caveats,
“The penny has also dropped in most
Economist Intelligence Unit, warned that
Africa, where 70 per cent of the
capitals that Africa needs to start making
the projects were still at a very early stage.
The oil and gas finds have the potential
As one Reuters commentary put it:
to translate into riches. But Philip Walker,
population is under the age of 30, is
more goods and selling them internally
“The common bottlenecks to doing
thinking big. Talks began last year on a
rather than just digging up minerals,
business on the continent – excessive
planned Cape-to-Cairo free trade zone
putting them on a ship to China and
bureaucracy and government inefficiency -
encompassing 26 countries, 525 million
importing washing machines or shoes on
coupled with a lack of regulation in many
people and $1 trillion in output which, it
the return run.” n
iNdiA’s sOLAR Ambitions By 2020 the Indian government wants to obtain 20,000 megawatts from solar power. Some analysts said it couldn’t be done, but they may have to eat their words, reports Vikas Bajaj.
olar power is a clean energy source. But in Khadoda, an arid part of northwest India, it can
also be a dusty one. Every five days or so, in a marriage of low and high tech, field hands with longhandled dust mops wipe down each of the 36,000 solar panels at a 25-hectare installation operated by Azure Power. The site is one of the biggest examples of India’s ambitious plan to use solar energy to help modernise its underpowered national electricity grid and reduce its dependence on coal-fired power plants. Azure Power has a contract to provide solar-generated electricity to a stategovernment electric utility. Inderpreet Wadhwa, Azure’s chief executive, predicted that within a few years solar power would be competitive in price
Anand Mahindra (L), vice chairman of multinational company Mahindra and Mahindra, and Farooq Abdullah, minister for New and Renewable Energy, unveil a five megawatt solar power plant in Rajasthan that will provide energy for 60,000 homes.
© 2012 New York Times News service
with India’s conventionally generated electricity. “The efficiency of solar technology will continue to increase, and with the increasing demand in solar energy, cost will continue to decrease,” Wadhwa said. Two years ago, Indian policymakers said that by the year 2020 they would Portfolio
A worker cleans solar panels at the 63-acre solar panel installation operated by Azure Power in Khadoda. india is trying to decrease its dependence on fossil fuels.
drastically increase the nation’s use of
could reach those numbers even a few
Power and Yingli Green Energy helped
solar power from virtually nothing to
years before 2020.
drive the drop in solar-panel costs. The
20,000 megawatts – enough electricity to
“Prices came down and suddenly things
firms aggressively increased production of
power the equivalent of up to 3.3 million
were possible that didn’t seem possible,”
the panels and cut costs in 2011 by about
modern US homes. Many analysts said it
said Tobias Engelmeier, managing
30 per cent to 40 per cent, to less than $1
could not be done. But, now the doubters
director of Bridge to India, a research and
a watt. Developers of solar farms in India,
are taking back their words.
consulting firm based in New Delhi.
however, have shown a preference for the
Dozens of developers like Azure, because of aggressive government subsidies and a large drop in the global price of solar panels, are covering India’s northwestern plains – including this village of 2,000 people – with gleaming solar panels. So far, India uses only about 140 megawatts, including 10 megawatts used by the Azure installation, which can provide enough power to serve a town of 50,000 people, according to the company. But analysts say the national 20,000 megawatt goal is achievable, and India May 2012
Chinese manufacturers like Suntech
“Over the last decade, India has opened the state-dominated powergenerating industry to private players, while leaving transmission, distribution and ratesetting largely in government hands.”
more advanced, so-called thin-film solar cells offered by suppliers in the United States, Taiwan and Europe. The leading US provider to India is First Solar, based in Tempe, Arizona. India does not have a large solar manufacturing industry, but is trying to develop one, and China is showing a new interest in India’s growing demand. China’s Suntech Power sold the panels used at the Azure installation, which opened last June. Industry executives credit government policies with India’s solar boom, unusual
praise because businesses usually deride
into greater competition, helping push
solar power. And being behind is now
Indian regulations as Kafkaesque.
benefiting India, as panel prices plummet,
Over the last decade, India has opened
In December, the government held its
enabling it to spend far less to set up
the state-dominated power-generating
second auction to determine the price
solar farms than countries that pioneered
industry to private players, while leaving
at which its state-owned power trading
transmission, distribution and rate-setting
company – NTPC Vidyut Vyapar Nigam –
largely in government hands. European
would buy solar-generated electricity for
NTPC is not creating open-ended
countries heavily subsidise expensive solar
the national grid. The average winning
contracts. The last auction, for example,
power by agreeing to buy it for decades
bid was 8.77 rupees (16.5 US cents) per
was for a total of only 350 megawatts,
at a time, but the subsidies in India are
kilowatt hour. That is about twice the
which will cap the government’s costs.
much lower and solar operators are forced
price of coal-generated power, but it was
The assumption is that the price of solar
about 27 per cent lower than the winning
power will continue to decline, eventually
bids at the first auction held a year ago.
approaching the cost of electricity
Germany, the world’s biggest solar-power
generated through conventional methods.
user, pays about 17.94 euro cents (23 US cents) per kilowatt hour. India, to be sure, still significantly lags
Most IndIan power plants are fuelled by coal and generate electricity at about
behind European countries in the use of
four rupees (7.5 cents) per kilowatt hour.
solar. Germany, for example, had 17,000
Yet, even in the December auction,
megawatts of solar-power capacity at
the recent winning bids were already
the end of 2010. But India, which gets
comparable to what India’s industrial
more than 300 days of sunlight a year,
and commercial users actually pay for
is a far more suitable place to generate
electricity – from eight to 10 rupees. And
“Solar’s costs are competitive with power plants and back-up generators that burn petroleum-based fuels, whose electricity costs about 10 rupees per kilowatt hour.”
In its solar-power auctions, moreover,
Vendors use solar powered lights at an open air evening market in the western indian city of Ahmedabad. Portfolio
Chinese workers sort solar panels in Hefei. Chinese companies have brought down the cost of solar panels and are now actively targeting the indian market.
solar’s costs are competitive with power plants and back-up generators that burn petroleum-based fuels, whose electricity costs about 10 rupees per kilowatt hour. “At least during daytime, photovoltaic panels will compete with oil-generated electricity more than anything else” in India, said Cedric Philibert, a senior GeTTY imAGes
analyst at the International Energy Agency in Paris. “This comparison is becoming better and better every month.” In addition to the federal government, several of India’s states like Gujarat, where
A monitor shows the power output from North delhi Power's Keshavpuram power station in New delhi. india, which gets more than 300 days of sunshine annually, aims to generate 20,000 megawatts of solar power by 2020.
Khadoda is located, are also buying power at subsidised rates from solar companies
enough or at low enough cost to survive.
Wadhwa, of Azure Power, said that
like Azure Power.
Consequently, or because their bids were
a solar-industry shakeout in India was
merely speculative, some developers are
Analysts do not expect India’s solar rollout to be problem-free. They say
trying to sell their government power
some developers have probably bid too
agreements to third parties, analysts say,
sector,” he said, “and then the market
aggressively in the federal auctions and
even though such flipping is against the
settles with a few players who have a
may not be able to build their plants fast
long-term commitment to the industry.” n
“Initially, a lot of new players enter the
Japan Courts Investment Strong regulations, high operating costs and weak government inducements have prevented foreign capital investment in Japan. But that may be changing, reports Hiroko Tabuchi.
help,” Muroi said. “Whether you are based
in the next decade. A special focus is on
in China or America, we want you to please
the three prefectures most affected by the
come do business in Aizu-Wakamatsu.”
March 2011 disasters: Iwate, Miyagi and
Call it the post-tsunami economic order. Japan, once a manufacturing powerhouse
abroad in the disaster zone, which will
investment, is confronting a new reality.
help with reconstruction,” Prime Minister
A year after natural and nuclear
Yoshihiko Noda said in a recent interview
catastrophes forced wrenching change on
with journalists. Direct investment from China to Japan
from years of downsizing and moving
jumped twentyfold in four years, to $314
factories offshore, the country is finding it
million in 2010, according to data from
must do what it has long resisted: welcome
Japan’s Finance Ministry – though as
an overall percentage of investment into
The new dynamic in Japan also signifies
Japan, money from China remains small.
part of a larger regional power shift. A small
Some experts say the true figure is much
but rapidly increasing amount of foreign
higher, however, because a large amount of
capital comes from its rising neighbour,
Chinese investment is carried out through
China, which last year surpassed Japan as
Hong Kong and other regions.
the world’s second-largest economy and
The new openness, if it lasts, will require
is looking to diversify its export-oriented
Japan to break decades of habits that have
approach to business.
discouraged foreign investment, even
Other recent Chinese manufacturing
as most other developed countries have
deals with Japan include plans for a plastics
done everything possible to lure foreign
plant in Tottori and a heavy machinery
capital. The Japanese impediments have
factory in Kochi, both in western Japan.
included relatively strong regulations,
“The Chinese are starting to look
high operating costs and tax rates, and
like saviours,” said Kotaro Masuda, an
weak government inducements – not to
economist at the government-affiliated
mention what outside observers have often
Institute for International Trade and
described as overt xenophobia.
Investment in Tokyo. “Any investment
According to data compiled by the
Japan gets is basically a plus, wherever it’s
United Nations, Japan has one of the lowest
from, because it means more jobs, more tax
levels of foreign investment. Japan’s inflow
income, more opportunities.”
of direct foreign investments came to just
Mayor Shohei Muroi knowS it iS
In February, the government invited a
0.24 per cent of its gross domestic product
a tough sell to get new companies to invest
delegation of 80 Chinese trade officials and
in 2009 – and even turned negative overall
in Aizu-Wakamatsu, a struggling industrial
executives for an investment tour. Japan
in the two years after that. In 2011, overseas
city just 96 kilometres from Japan’s most
now says it aims to double the flow of
companies moved 183 billion yen ($2.3
notorious nuclear plant. So in September,
foreign direct investment into the country
billion) more out of Japan than they put in, according to the Finance Ministry.
Muroi did the unthinkable. He flew to China to ask a fast-growing maker of heavy © 2012 New York Times News service
“We greatly welcome investment from
known for its exports and overseas
Japan’s economy, which was already listless
A couple walks near the Aizu-Wakamatsu castle in Aizu-Wakamatsu Fukushima prefecture in Japan. The area was devastated by last year’s earthquake and nuclear disaster.
Fukushima, where Aizu-Wakamatsu is.
machinery to set up shop in his town. His move was a stark role reversal in a nation more accustomed to sending factory jobs to China, rather than recruiting them to move the other way. “We’ve come to a point in Japan where we can no longer grow without outside May 2012
“Any investment Japan gets is basically a plus, wherever it’s from, because it means more jobs, more tax income, more opportunities.”
Even now, many of Japan’s own companies are preferring to put their money into growth opportunities abroad rather than at home. The same figures show that the net outbound investment from Japan reached 9.1 trillion yen ($113 billion) in 2011, accelerating the so-called hollowing out of Japanese industry long bemoaned by
Mayor Shohei Muroi at his office in AizuWakamatsu. He recently flew to China seeking out manufacturers to invest in his city of 125,000 people.
the nation’s policymakers. It is a dangerous imbalance, economists
economic crisis in 2009, a semiconductor plant run by Fujitsu, a cornerstone of
say, particularly since Japan is struggling
the local economy for almost 40 years,
to reinvigorate economic growth, protect
announced it would eliminate a third of its
employment and uphold living standards.
Moreover, recent studies have suggested
The outlook for Japanese manufacturers
“Everybody is fretting that Japanese companies are moving overseas. If that’s the case, Japan should balance that out by opening up more to more foreign investment.” that continues to be punishingly strong,
that foreign-affiliated businesses in
has only worsened since then. Disruptions
have lowered profits and pushed exporters
Japan tend to create more jobs than
from last March’s disasters and the
to move even more production offshore.
domestic ones, and that they tend to
resulting energy shortages, along with a yen
No wonder that when Muroi returned
have higher productivity. “Everybody is fretting that Japanese companies are moving overseas. If that’s the case, Japan should balance that out by opening up more to more foreign investment,” said Kyoji Fukao, an economics professor at Hitotsubashi University. “Foreign companies that are successful enough to think about coming to Japan are highly competitive and productive,” he said, “which means they will invest, create jobs, pay high salaries, spark new demand.” Aizu-Wakamatsu, the fourth-largest city geTTY images
in Fukushima prefecture with a population of 125,000, has already found that domestic industry can no longer sustain local employment. At the height of the global
Towns such as Namie, that sit within the evacuated 20 kilometre exclusion zone around the Fukushima Daiichi nuclear plant, are still abandoned. Portfolio
from China with a manufacturing agreement by the heavy equipment-maker Zoomlion, he received a hero’s welcome in this city and Fukushima prefecture. “The deal could create jobs and revitalise Aizu,” the newspaper Fukushima Minpo said in an editorial. “It’s a ray of hope for Fukushima.” the ChineSe are also buying struggling Japanese companies. Last year, the washing machine and refrigerator business of Sanyo Electric was bought by Haier, a Chinese company, for 10 billion yen ($124 million). In 2011, for the first time on record, the Chinese companies in Japan exceeded those
Japan’s economy has been stagnant for over a decade now. Jobs, especially in the electronics sector, have moved offshore and foreign investment is needed to stimulate the economy.
by American businesses in the country.
from whoever is willing to offer it.
number of mergers and acquisitions by
For Chinese companies, learning to
In February, the central government
“We are No. 1 in Japan for location subsidies,” Yuhei Sato, the Fukushima
appeal to the demands of finicky Japanese
designated districts in Iwate and
governor, said at a recent investment
customers could also help refine goods
Miyagi prefectures as “special disaster
seminar. One company lured by the
and services for their growing domestic
reconstruction zones” that offer incentives
subsidies, Canadian Solar, which is based in
economy – not to mention make them
and tax breaks to new investors. In Miyagi,
Ontario and has strong links to China, is in
more globally competitive. “Our aim is
for example, companies that invest in the
talks to set up a solar panel factory in either
to build products that satisfy Japanese
new zones are exempt from corporate tax for
Miyagi or Fukushima.
standards,” Zoomlion’s chief executive,
five years. But some of the most generous
Zhan Chunxin, said at a September news
subsidies could come in Fukushima, which
could be crucial to Japan’s effort to attract
conference. The company was expected
has allocated 225 billion yen ($2.8 billion)
foreign investment, said Shojiro Nakamura,
to set up an office in Aizu-Wakamatsu
to industry in the prefecture, including 30
a consultant at Accenture, the global
in April and work with a local partner to
billion yen to hand out to new companies
consulting company, which opened an
build a small manufacturing plant in the
that open in the prefecture.
office in the city last June. Rent and other
Regional cities like Aizu-Wakamatsu
city to make concrete pump trucks for the
costs are cheaper in Aizu-Wakamatsu
than Tokyo, and it has a skilled work force, making it an attractive investment
Some people in the disaster zone have
proposition, Nakamura said.
expressed concern that foreign companies,
But the longer-term challenge for Aizu-
helped by generous subsidies, will hurt local businesses trying to rebuild. But the
Wakamatsu, Nakamura said, is to create
overriding impulse seems to be to seek help
lasting employment that is not contingent on subsidies or cheap costs. “Even if companies set up here to take advantage of the subsidies, they would all leave again once those are gone,” he said. Instead, a joint initiative with the city, a local university and Accenture aims to make Aizu-Wakamatsu a centre for
research and development, a “smart city”
Japan’s Finance Minister Jun Azumi (R) escorts his Chinese counterpart Xie Xuren (C) at the Finance Ministry in Tokyo. The Chinese are buying struggling Japanese firms.
that runs on renewable energy and supports high-tech jobs. Investment from China is fine, Nakamura said, “but ultimately, we want to be more like Silicon Valley.” n
The popularity of Apple’s devices and the resulting surge in app sales has made it an appealing target for hackers.
App Store Under AttAck Apple’s iTunes Store appears to be the victim of its own success with increasing incidents of account hacking and false apps, report Evelyn Rusli and Brian Chen. In a lIttle more than an hour,
up, checked my email, and I could see
Ryan Matthew Pierson racked up
these purchases happening in real time.” Pierson raised the issue with Apple and
have been hijacked or that some apps
currency that he could use to buy guns,
his bank, and the problem was eventually
are falsely advertised. And they come
nightclubs and cars in iMobsters, a
resolved. But his experience is hardly
from creators of apps, who say they are
popular iPhone game. One problem:
unique, as reflected by hundreds of online
having to deal with fraudulent purchases
Pierson, a technology writer in Texas,
complaints saying that Apple’s iTunes Store,
that drain their time and resources.
has never played iMobsters.
and in particular its App Store, which the
Software-makers also complain that
company has portrayed as the safest of
competition in the App Store has
shopping environments, is not so secure.
become so brutal that many companies
$437.71 in iTunes charges for virtual © 2012 New york times News service
The complaints come from consumers like Pierson, who say their accounts
“This was fraud,” said Pierson, recalling the November incident. “I woke
resort to artificially inflating their popularity rankings to grab attention.
The scale of the problem is difficult to gauge without Apple’s cooperation,
complained about stolen funds. In February, Daniel Saewitz, a 20-year-
It’s a change for Apple, which was once
though there is widespread anecdotal
old Syracuse University student, was
criticised for its micromanaging of the App
evidence, even on Apple’s own site. On
charged $81 for purchases related to a
Store. Now the problem is not too much
one Apple support forum, a thread titled
Chinese iPhone game. He alerted Apple
control, but too little.
“iTunes store account hacked,” there are
and changed his iTunes password. But
some 1,370 replies, starting in November
24 hours later, he said, his account was
time a platform is successful,” said David
2010 and extending to 15 March. The
hacked again. In an email, Apple said
Edery, chief executive of Spry Fox, a small
week prior, more than 100 people on
it was refunding Saewitz’s money, but
software company that sells games in the
Twitter who said they were iTunes users
added that it was making an exception to
“This kind of thing just happens any
its usual rules.
App Store. “People start flooding into it and it starts to get crazy.” The App Store offers more than 600,000 applications for iPhones, iPads and iPod Touches, and has generated billions in revenue for Apple and its developers. That makes it both the best deal going for software-makers and consumers, and also a hulking target for those looking to manipulate the system and cheat people. Apple declined a request for an interview, but said in a statement that it was working to enhance security. It advised customers whose payment information had been stolen to change
“Apple declined a request for an interview, but said in a statement that it was working to enhance security. It advised customers whose payment information had been stolen to change their iTunes passwords and to contact their financial institutions.”
For developers, the scams can cause big headaches, eating up resources and damaging their reputations. Several game-makers in China, where many of the hacks appear to originate, said they had lost hundreds of thousands of dollars because of fraud. Hoolai Game, a Beijing-based developer that introduced an iPhone app last year, looked at its monthly payments from Apple and found that they were roughly 20 to 50 per cent less than the sum of the daily reports it gets from the company. Hoolai and others say they believe these missing payments are
their iTunes passwords and to contact their financial institutions. In the shadowy world of hacking, it’s often unclear how criminals get iTunes passwords or credit card information. But the App Store, and Apple’s broader iTunes Store, have become playgrounds for illicit transactions. And the web is rife with App Store scams. On some Asian online marketplaces, like Taobao or DHgate, some sellers are offering access to iTunes accounts for as little as $33. One seller on DHgate, for instance, has sold 56 iTunes accounts for less than $35 each, promising thousands of dollars in “credit”. There are services that claim to reuters
generate codes for iTunes gift cards, and forums that explain how to use prepaid Visa cards to get free App Store purchases.
Apple CEO Tim Cook highlighted that 25 billion apps had been downloaded during an Apple event on 7 March in San Francisco.
Above: Jian Huang, the CEO of Hoolai, says its monthly payments from Apple are less than the daily sales reports. The company believes the missing payments are fraudulent transactions that were wiped out by Apple. Below: iTunes customers use a single password and account to access all Apple services.
fraudulent transactions that are wiped out
developer, who spoke on
the condition of anonymity, said he started to notice
more troublIng for developers is
discrepancies in payments
that consumers whose accounts have been
last summer. The developer
improperly charged often blame the game-
said his team had sent
makers. The reviews in the App Store
multiple emails to Apple,
for Kingdom Conquest, from the Japanese
but that it had not addressed
game giant Sega, include dozens from
whether the missing
incensed users who accuse Sega of robbing
payments were a result of
them. Sega, which first noticed a burst
fraud. Over the past year,
of fraudulent transactions last summer,
the gap has amounted to
is still working on the problem, according
millions of dollars, according
to Ben Harborne, a brand manager at
to internal documents
provided by the developer.
“We are very worried about reputation,”
With little action from
said Jian Huang, president of Hoolai, who
Apple, some affected developers have
and developers said they did not blame
hopes to introduce a game in the United
banded together. One Chinese developer,
Apple for their misfortunes, nearly all said
States this year. “We have no way to tell the
CocoaChina, has created an anti-fraud
the company could be more responsive,
customer that we’re victims too.”
alliance of roughly a dozen developers.
and noted that it lacked even a dedicated
One successful United States game
While many of the affected consumers
phone line to deal with complaints. “Apple Portfolio
that it is a scam and should be removed.
wants to pretend that everything is magic,”
not what they seem to be. Apple has strict
said Alex Stamos, co-founder of iSEC
guidelines for developers, and it has tools
John Casasanta, owner of the iPhone
Partners, a security firm. “They need to
and human reviewers to screen apps. But
app studio Tap Tap Tap, said the issue of
admit that their products can be used by
bad ones do slip through. One $2 app, for
developers manipulating the App Store
bad people to do bad things.”
example, promises extra virtual coins for
remained largely unaddressed. “Apple has
people playing the game DragonVale. But
been doing the barest minimum to keep
iTunes customers use a single account
when customers download the app, no coins
these things under control, because from
and password to access all Apple services.
appear. The app has received dozens of one-
their perspective, there’s simply not a
For example, the same login can be used
star reviews from customers complaining
problem,” Casasanta said. n
One problem, Stamos said, is that
to download a $1 game or buy a $2,000 laptop through the Apple Store app. He said Apple could adopt a two-step verification method like Google’s. For example, if a user wanted to log in to the iTunes store on a new device, Apple could send a message to his iPhone containing a code, which he would enter to verify his identity. Some App Store problems are the fault of the developers themselves – including those who make it harder for consumers to trust the store by cheating the system. The easiest ways to find new apps are Apple’s Top 25 lists for different categories, including “most downloaded”. But some of those downloads may not be generated by real people. Walter Kaman, an independent programmer, said he was disheartened by a phone call from a service that offered to put his game in the Top 25. He said the promoter, whom he declined to name so as not to attract clients to the service, had hired someone to build an
Ryan Matthew Pierson, a blogger at the tech blog Lockergnome, had purchases made via his PayPal account in the App Store without his knowledge.
army of software ‘bots’ that automatically download apps and drive up their rankings. The company wanted $5,000 for this service, said Kaman, who declined. Edery of Spry Fox said his company was approached in October by a firm called GTekna, which offered to push its apps into the Top 25 for $10,000. ChangMin Pak, GTekna’s chief executive, said offering such a service because Apple reminded developers in February that it was not allowed. Then there are the customers who have been tricked into downloading apps that are May 2012
Analysts project that iPad sales will exceed 13 million in the first quarter of this year and could exceed 60 million by the end of the year.
in an interview recently that it stopped
THE BEST OF LEISURE AND LIFESTYLE
A REFLECTION OF TIME The Malacca Straits Mosque is located on a man-made island near Malacca. At high tide it looks like a floating structure. May 2012
Malaysia’s oldest city has always been a melting pot of cultures. It is this vibrant blend that creates Malacca’s unique atmosphere, architecture and food, reports Naomi Lindt.
n the tranquil grounds of the Cheng Hoon Teng Temple, Malaysia’s oldest Taoist house of worship, late afternoon visitors bowed and offered burning wands of incense to the Goddess of Mercy, the deity for whom the temple was founded in the 1600s. Tourists quietly watched or focused cameras on the structure’s ornate, figurine-covered roof. afternoon in Malacca, Malaysia’s oldest
buildings, the people, the culture,” said
muezzin’s call from the nearby Kampung
city, just two hours south of Kuala
a local resident, Colin Goh, 66, at Cheng
Kling Mosque, an amalgam of Corinthian
Lumpur and about four hours northwest
Hoon, surrounded by a pair of red-and-
columns and Portuguese tiles built by
of Singapore. But underneath that
gold sedan chairs and black-and-white
Indian Muslims in 1748. And down the
sleepiness, its foundation of vibrant
photos that chronicled decades of the
street at the 230-year-old Sri Poyyatha
multiculturalism, which dates back
temple’s religious festivals. “Everything
Vinayagar Moorthi Temple, the country’s
centuries, is very much alive and
you touch that is not new is old.”
oldest Hindu temple, bare-chested and
increasingly accessible, as it welcomes
barefoot men in pastel-hued sarongs and
a handful of hotels and millions of
Chinese and “God only knows what else”
garlands made of yellow blooms gathered
international visitors a year.
heritage, Goh, a retired civil servant who
The placidity was interrupted by the
“I just love Malacca – its laid-back,
now manages 8 Heeren Street, a restored
slow pace of life and the history in the
18th-century Dutch shophouse, embodies
It was another seemingly sleepy
With his mix of Portuguese, Dutch,
Cheng Hoon Teng (the Temple of the Green Cloud) is situated close to Jalan Tukang Emas, also known as ‘Harmony Street’ because of its proximity to the Kampung Kling Mosque and the Sri Poyatha Moorthi Temple. Portfolio
Essentials Travel the city’s colonial past. Founded around 1400 by a Malay-Hindu prince, Malacca, within a century, became Southeast Asia’s most important trading port, luring an international cast of colonialists and merchants seeking a piece of the region’s lucrative spice trade. The hub of Malacca’s civic colonial sites is Dutch Square – also called Red Square because of the colour of its buildings – where tourists pose in front of the centuryold Queen Victoria Fountain and trishaws festooned with plastic flowers gather. fort, one of Asia’s oldest European-built structures, erected by the Portuguese 500 years ago, and the imposing Stadthuys, or
Nearby are the ruins of the A’ Famosa
Malacca’s lively Chinatown district is famed for its decorative shophouses that date from the 19th century.
town hall, built by the Dutch in 1650 and
The Malacca River divides the city in two, with most of the major tourist attractions found on the west bank.
and grand residences with ornately tiled
identities. At Temple Street, a shop run
stoops built by wealthy families of the past.
by a local artist, watercolours and hand-
For centuries, these streets served as the
painted tiles depict idyllic street scenes.
town’s commercial and residential centre.
In another building, Nancy’s Kitchen, a
Malacca’s eclectic charm, with some
no-frills restaurant known for its local
help from a UNESCO World Heritage
Nyonya cuisine, sells addictive delicacies
designation in 2008 and its reputation as
like buttery pineapple tarts and onde-onde,
later painted salmon red by the British,
one of Malaysia’s most exciting culinary
glutinous rice balls filled with Malacca’s
Malacca’s last foreign rulers, whose reign
destinations, has resulted in a steady
famous palm sugar, known as gula Melaka,
lasted until 1957.
growth in tourism. Last year 12 million
and covered in fresh coconut.
visitors came, an increase of over 17 per
This rich cultural heritage is also
ON THE west side of the Malacca River,
cent from 2010, according to a state
being celebrated in new lodging options.
which flanks the square, along the old
In 2009, a 100-year-old residential
centre’s narrow, atmospheric streets, are
While some heritage buildings are
property down the street was converted
hundreds of lantern-hung shophouses,
still occupied by generations-old family
into the 14-room Courtyard @ Heeren
some distinctly Chinese in style, others
businesses – silversmiths, watchmakers,
hotel, which blends era-appropriate
bearing geometric Art Deco trademarks,
dim sum purveyors – others have newer
furnishings with modern amenities.
At the Snail House nearby, a charming French-Malaccan couple, Serge and K.C. Jardin, rent rooms in their carefully restored century-old home, with an open courtyard, a grand spiral staircase and high ceilings, offering
Malacca is famed for its food, and there’s no shortage of restaurants serving classic Nyonya cuisine.
travellers the chance to appreciate the nuances of Peranakan architecture. “When you’re inside, you feel as if you’re in the presence of a wealthy Baba,” Jardin said. “And though you’re in the city centre, it’s so quiet you forget where you are.” Josephine Chua, a self-described “busybody housewife,” history buff and proponent of Malacca’s historic preservation, agreed. “This place has been built on harmony since the 15th century,” she said. Chua, 55, traces her local roots back
race and religion, but what we do always
grandmotherly spot with lace curtains
ask each other is, ‘Have you eaten?”’
and pastel walls just a short drive from
nine generations, to 1765, when one of her
the historic centre, septuagenarian
paternal ancestors migrated from Fujian,
WHERE ONE has dined is not a
chefs cook mouthwatering renditions of
China. “The religions have coexisted side by
question to be taken lightly in a city of
classic Nyonya dishes – chicken stewed
side for centuries – that’s what makes us so
restaurants serving home-cooked dishes,
with earthy, smokey keluak nuts; a fluffy
unique and the town so great to live in,” she
many of which have been passed down
omelette flavoured with dried shrimp and
said. “We don’t ask each other about one’s
through generations. At Aunty Lee, a
chilli; and cendol, a shaved ice dessert
Dutch Square, also known as Red Square, is Malacca’s colonial heart and was the centre of civic administration. Portfolio
Essentials Travel laughing Buddha statues, antiques and old family photos. A few streets away, at Teo Soon Loong Chan restaurant, the energetic Tan brothers sweat over a pair of woks, producing ridiculously tasty southeastern Chinese teochew fare, like handmade pillowy, deep-fried tofu cubes with minced meat, and platters of steamed pomfret, a local fish, served with shiitakes and cilantro. The restaurant, in a 120-year-old building whose low ceilings are hung with a pair of fraying chandeliers, was once a store run by the brothers’ 85-year-old father, who escaped to Malacca in the 1930s when the Japanese invaded China. Jonker Street, which was once known for its antique shops, now caters for tourists. On weekends there’s a food and retail market.
THOUGH AUTHENTIC culture is easy to find in the city, residents like Chua and Goh worry about its future. The old centre is now home to a recently opened Hard Rock Cafe, and many historic buildings have fallen into disrepair or been transformed into conventional souvenir shops and hostels, with no government financing to protect them. Perhaps the most glaring example is Jonker Street, officially called Jalan Hang Jebat. Once known for its antiques shops, the strip now draws tour groups trawling stores stocked with Birkenstock knockoffs, batik linens and cheeky T-shirts with sayings like, “If YouTube MySpace, I’ll Google Your Yahoo.” It’s particularly raucous on weekends, when a food and
Donald & Lily’s is a small establishment that is known for its Nyonya laksa – a popular local curry.
retail night market takes over.
topped with coconut milk and gula Melaka.
entrepreneurs centuries ago never
Still, what captivated explorers and seems far away, whether it’s during a
At Donald & Lily’s, locals and tourists
contemplative moment in a crumbling
and piquant concoction of fresh coconut
fort or a stroll along the old town’s back
milk, sliced fish cakes, cockles, crunchy
streets and its fragrant Chinese medicine
bean sprouts, and pounded galangal,
shops. Or while you are sipping a
garlic, lemon grass and shrimp paste.
steaming cup of tea during a downpour at
The retired proprietor, Donald Tan, who started selling laksa from a trishaw 30 years ago, now offers food in two rooms attached to his majestic Peranakan house. He is happy to give inquisitive visitors a peek into the home, which is jammed with May 2012
alike snack on Nyonya laksa, a creamy
There are so many different types of laksa that it even confuses the Malaysians. But the chicken curry is a staple that is found around the world.
Zheng He Tea House, a hidden spot two blocks from Jonker Street. “Once you step into Malacca, you can feel the positive energy,” said Pak Siew Yong, the teahouse’s friendly owner. “Foreigners, once they come here, they don’t want to go home.” n
A view through ‘Viewing Machine,’ by the Danish artist Olafur Eliasson, at Inhotim in Brumadinho, Brazil.
ONE MAN’S ECCENTRIC PASSION Portfolio
Bernardo Paz, a Brazilian mining magnate, has created a vast garden of art that drew nearly 250,000 visitors last year, reports Simon Romero. May 2012
NO WONDER THEY CALL BERNARDO PAZ THE “EMPEROR OF INHOTIM.” Some 1,000 employees, including curators, botanists and concrete pourers, swarm around Inhotim, his contemporary-art complex in the hills of southeast Brazil. Globetrotting art pilgrims absorb stunning works like Doug Aitken’s ‘Sonic Pavilion,’ which uses high-sensitivity microphones placed in a 192-metre hole to deliver the bass murmur of the Earth’s inner depths. A whiff of megalomania seems to emanate from Inhotim’s eucalyptus forests, where Paz has perched more than 500 works by foreign and Brazilian artists. His botanical garden contains more than 1,400 species of palm trees. He glows when speaking of
public, like Eugenio Lopez’s Coleccion Bernardo Paz, a mining magnate, employs 1,000 people at Inhotim, his 5,000-acre complex of contemporary art and exotic gardens.
Jumex in Mexico City. And much farther afield, in an archipelago in Japan’s Seto Inland Sea, the Benesse Art Site similarly blends cutting-edge architecture with contemporary art. But none of these places have the hotclimate exuberance of Inhotim, situated in mining-scarred hills far from Brazil’s collecting scenes in Sao Paulo and Rio de Janeiro. Art historians and curators often come away marvelling at the sheer scale and chaotic vision that Paz has created at Inhotim. “The amount of space given to single artist projects is unparalleled, as is the way visitors travel from building to building, refreshing their senses, being in nature,” said Beverly Adams, an authority on Latin American art who curates the private Diane and Bruce Halley Collection in Scottsdale, Arizona. Overwhelming the cognoscenti still seems to thrill Paz, a high school dropout whose first work experience involved pumping petrol at filling stations owned by his father. He went on to work at Belo Horizonte’s stock exchange, which he said he loathed, before going into mining for iron ore and cobbling together a privately held business empire that finances Inhotim’s operations. SOME WORKS in Inhotim seem to question, if not actually insult, the concept
Brazilian artist Cildo Meireles’ ‘Desvio para o vermelho’. More than 500 artworks by foreign and Brazilian artists are scattered around Inhotim.
Inhotim’s rare and otherworldly plants, like
said of Inhotim during a rare interview.
of profiting from mining the Earth’s treasures. For instance, an installation by the US artist Matthew Barney within geodesic domes includes a scene of
It is hard to say what people might
unmistakable environmental violation: a
make of Inhotim (pronounced in-yo-
huge mud-caked tractor clutching a tree
Paz, a lanky 61-year-old mining
TCHEEM) centuries from now. Some
and its roots. To arrive at this creation,
magnate, speaks in barely audible
masterpieces from Brazil’s booms still
visitors trek through mineral-bearing
whispers. He married his sixth wife in
survive as testament to past extravagance,
hills, largely cleared of Mata Atlantica,
October. He has white hair down to his
like the celebrated opera house built at
the forest that once covered the region.
shoulders and pale blue eyes, giving him
the height of the rubber boom at the end
an appearance reminiscent of the gaunt,
of the 19th century in Manaus, the largest
in 2011, and it expects well more this year.
debauched Brazilian rancher played by
city in the Amazon.
But Paz, who says his companies provide
the titun arum from Sumatra, called the “corpse flower” due to its hideous stench.
Klaus Kinski in Werner Herzog’s 1987 film, Cobra Verde. “This is a project to last 1,000 years,” Paz
Elsewhere in Latin America, majestic
Inhotim received nearly 250,000 visitors
Inhotim with about $60 million to $70
private contemporary-art collections
million for operations each year, sees
have also been made accessible to the
no need to stop there. In order to make Portfolio
Essentials Art Inhotim self-sustaining, he said he was
hundreds of artworks, including a pavilion
as an idol for Brazil’s growing number of
planning to build no fewer than 10 new
he built for one of his ex-wives, the
millionaires. “He broke every company he
hotels there for visitors, an amphitheatre
Brazilian artist Adriana Varejao.
had until he was 50 years old.”
for 15,000 people, even a complex of
Seated in one of Inhotim’s restaurants
Paz also waved off claims in Brazilian
“lofts” for those who want to live amid the
one sweltering day in February, he
newspapers that Inhotim’s expansion was
collection. He said Inhotim, which sprawls
proceeded to quickly consume three
partly due to money laundering, calling such accusations a “mountain of nonsense
Work by the Cuban artist Diango Hernandez.
and lies.” “Clearly, no one is totally transparent,” he acknowledged. Still, he asserted, “The newspapers never proved anything.” FOR NOW, he seems more concerned with luring the masses to Inhotim to see works like ‘Restore Now,’ a mammoth send-up of academic norms by the Swiss artist Thomas Hirschhorn, in which texts by French
The ‘Sonic Pavillion’, by Doug Aitken, uses high-sensitivity microphones placed in a 192-metre hole to deliver the bass murmur of Earth’s inner depths.
A pavilion Bernardo Paz built for one of his ex-wives, the Brazilian artist Adriana Varejao.
over nearly 2,020 hectares, has room for at
cocktails, murmuring about the
philosophers like Jacques Derrida and Gilles
least 2,000 more works of art.
machinations of bankers and the global
Deleuze are interspersed with images of
financial crisis. “Don’t turn that on,” he said,
Inhotim’s growth over the past decade has provided a jolt to the surrounding economy,
pointing at a digital recorder on the table.
Asked about specific works, Paz deftly shifts the conversation to other topics.
with many of the adult residents of villages
A day later, in an air-conditioned
nearby employed as labourers by Inhotim,
building that incorporated ‘Narcissus
He smiled when speaking of his new
making them dependent on Paz’s vision of
Garden,’ a work by the Japanese artist
wife, Arystela Rosa, 31, pregnant with his
assembling a “Disneyland” for contemporary
Yayoi Kusama, into its design, he seemed
seventh child. Other things at Inhotim
art in the state of Minas Gerais.
to revel in disparaging some other titans
draw his interest, like the towering
“Before Inhotim, our men worked
of business in Brazil, and contending that
tamboril trees or the traira, a carnivorous
in the mines or moved to Sao Paulo to
poor visitors to Inhotim were often better
fish in the ponds here that can draw blood
make money,” said Profira de Souza, 74, a
able to absorb the complex’s importance.
from visitors foolish enough to dip their
resident of the village of Marinhos whose
He also reserved some special disdain for
fingers in the water.
son and grandson work at Inhotim. “God
Brazil’s richest man, Eike Batista.
“There are works of art here which I haven’t entered yet, which everyone told
lowered Bernardo Paz down to us, and I
“Suddenly, he appears with billions
pray he doesn’t take him back too soon.”
and billions, saying he’s going to be the
me were spectacular, but why should I
Still, Paz insisted he was no emperor.
world’s richest man,” he said of Batista,
go in there?” Paz said. “I don’t consider
He called himself an “isolated person”
a mining entrepreneur who gets largely
myself passionate for art. But gardens,
who lacks real friends, opting to live amid
glowing treatment in the news media here
that’s what I like.” n
When the Leaning Tower of Pisa was straightened, contenders emerged for its crown as the most tilting tower. The current record holder is in Germany, but St. Moritz may have a winner, reports John Tagliabue.
IN AN EARLIER ERA IN EUROPE,
Zurich, the country’s largest city, where
contend for the Guinness title.
engineers have plotted a course to keep it
it was not unusual for the sudden and
In the Swiss ski resort of St. Moritz,
unexpected departure of a monarch to
better known for cashmere than cows,
from toppling over. “This is for us what
touch off a prolonged period of claims
leans a tower that some say should
the bell tower is for Pisa, or St. Peter’s for
and counterclaims until one of the
hold the real claim to the title. The 12th
the Vatican,” said Baracchi, 69, leading
pretenders finally prevailed.
century structure, known as the tower
a visitor to the top of the square tower,
of St. Mauritius, for a church it once
which unlike Pisa’s leaning tower is
broken out after engineers performed
accompanied, not only leans, it stands on
closed to the public.
extensive renovations on the legendary
shifting ground that ensures that every
When an earthquake shook the
Leaning Tower of Pisa, sharply reducing
few years hydraulic jacks must be called
Friuli region of northeastern Italy in
its tilt. While that assured that the
in to straighten it up.
1976, the tower in St. Moritz lurched so
Something like that seems to have
tower would survive to delight future
For 35 years, until his retirement four
dangerously that some among the city
generations of tourists, the repairs ended
years ago, Pietro Baracchi worked in the
fathers believed the time had come to tear
its status as leaning-est tower, moving it
St. Moritz building department and was
it down. “It tipped as much in one night
to somewhere in the middle of the pack
responsible for the safety of the 33-metre
as it should in one year,” Baracchi said.
and touching off a competition, which
tower. To see him gaze up at it is to see a
still simmers, for the crown.
parent fondly regarding an exceptional,
The matter seemed to have been settled a few years ago, when Guinness
The church that gave the tower its name was dismantled in 1893, when
if slightly different, child. He still visits
World Records in London awarded
the tower once
the title of ‘Farthest Leaning Tower’ to
a month and
one that accompanies a solid red brick
church in the village of Suurhusen, in
northern Germany. It leans at an angle
of 5.19 degrees, compared with the Pisa
to measure its
tower’s 3.9 degrees.
inclination. He then sends
The German newsmagazine Der Spiegel,
the results to
in an article last year, listed at least
three other German towers it said could
© 2012 NEW YORK TIMES NEWS SERVICE
But then other contenders emerged.
The 12th-century tower of St. Mauritius in the Swiss town of St. Moritz might be a contender for the record of ‘Farthest Leaning Tower’. It is named for the church it once accompanied.
it was deemed to be in acute danger of collapse. In typical Swiss style, the tower’s fate was put to a general vote of the adult population, and about 84 per cent voted to save it. Even before the earthquake, horizontal supports of reinforced concrete had been installed under the base of the tower to stabilise it. Then, in 1983, hydraulic lifts were used to straighten the tower slightly and pads were inserted underneath it to further ensure its safety. In 2005 the hydraulic lifting was repeated to correct the inclination and another correction is planned. “Whether this is the most inclined tower in Europe, with a 5.364 degree inclination angle, I do not know,” wrote Alexander Puzrin of the Technical University in an email. “We are planning a new vertical
“Towers lean for different reasons, Puzrin wrote, but the St. Mauritius tower tilts because it, and the entire neighbourhood surrounding it, are essentially perched on a landslide that creeps inexorably down toward the shore of the lake on which St. Moritz lies.” adjustment campaign for 2013,” he added. Towers lean for different reasons, Puzrin wrote, but the St. Mauritius tower tilts
Pietro Baracchi employs sensitive instruments installed inside the tower of St. Mauritius to measure its inclination.
because it, and the entire neighbourhood surrounding it, are essentially perched on a landslide that creeps inexorably down toward the shore of the lake on which St. Moritz lies. Recently, three seismographs were installed, including one at the base and another at the top. When they begin registering later this year they will transmit data on the tower’s tilt directly to the experts in Zurich. Baracchi says he will continue his monthly visits. The landslide, Puzrin said, which is about a 1½ kilometres and a eight-tenths of a kilometre wide, can move by as much as 45 centimetres a year. Nadia Scartaccini, who moved here from Italy 26 years ago and now works in the Bata shoe store just below the tower, believes him. “We have to get out by the end of the year,” she said, then lifted a corner of carpet to reveal jagged cracks in the concrete floor. Other more modern buildings in the neighbourhood were built to withstand the landslide, but older buildings will be torn down to enable the city to inject concrete into the slide, slowing its movement. GRAPHEAST
Sidewalks and streets show rippled asphalt,
This picture taken in 1993 shows the start of the stabilisation works at Pisa’s famous leaning tower.
where the downward movement of the slide has forced up the ground beneath them. Last year, electrical and water mains in the area had to be replaced. Portfolio
Essentials Architecture PISA, FOR its part, is not feeling the threat from Suurhusen, St. Moritz or anywhere else. “Frankly, we hadn’t heard about it,” Daniela Purchielli, director of tourism in the Pisa city government, said by telephone. “Our numbers are increasing.” Last year, more than 426,000 visitors came, compared with 402,000 the year before. No one counts the numbers of visitors to St. Moritz’s entry in the leaning tower approached Guinness for recognition of its tower, Sara Roloff, director of public relations for the local tourism organisation, replied, “Not to my knowledge.” Yet the tower remained, she
duel. Asked whether the town had
A 15th-century church with its tilting tower in the small northern German village of Suurhusen is listed by The Guinness Book of World Records as the most tilted tower in the world.
said, “one of the emblems” of St. Moritz. “For us it will always be there, with its huge history,” she said. Ludwig Guertler, from Berlin, clutched a snowboard while awaiting a bus ride to the slopes. He said he was in St. Moritz on business, living in a chalet not far from the tower, but had only recently noticed its tilt. “This is the first time,” he said, glancing up. Other visitors were astonished that anyone could miss it. “We just stumbled on it. We didn’t know about it,” said Alessandro Barzaghi, 37, a restaurant chef from Italy on vacation here. “And
“In 2005, the St. Moritz tower tipped to an angle of 5.4 degrees, more than the Guinness titleholder in Suurhusen, but it was hoisted back to a safer angle of 5.08 degrees. Puzrin said he would not again let the tower tilt beyond 5.36 degrees before correcting the inclination.” May 2012
The St. Mauritius tower stands on shifting ground that causes it to lean more every year. The tower is inclined 5.364 degrees, which is more than the 5.19 degrees of its competitor in Suurhusen.
imagine that they wanted to demolish
to an angle of 5.4 degrees, more than the
it!” Francesca Buttini, a lawyer who
Guinness titleholder in Suurhusen, but it
accompanied Barzaghi on the tour, said
was hoisted back to a safer angle of 5.08
she doubted Pisa had much to worry
degrees. Puzrin said he would not again
about. “Now, Pisa,” she said, throwing up
let the tower tilt beyond 5.36 degrees
her hands. “That’s an entirely other thing.”
before correcting the inclination.
To a certain extent, it has to be
But that is not to say, however, that
admitted, the whole competition is
the contest for the title of tippiest tower
pointless. Barring human intervention,
is inconsequential. Frank Wessels, the
some of the leading contenders, such
pastor of the church in Suurhusen said
as those in Pisa and St. Moritz, would
the benefits were striking. “We always
have long since have reduced to rubble.
had tourism,” he said by phone from
(Suurhusen’s bell tower is considered
Germany, “But it has increased tenfold.
There’s even interest from Japan and
In 2005, the St. Moritz tower tipped
South Korea.” n
TS C E J B
On the eve of the 50th anniversary of Marilyn Monroe’s death, memorabilia associated with the screen legend continues to haunt the world’s auction rooms commanding record-breaking prices, reports Andy Round.
Of DE Sir
Margaret Barrett, the director
down the phone. “Sometimes people come
you want a major return on your
of Entertainment Memorabilia for
into my department and start moving
millions forget shares or property, you
Bonhams & Butterfields is on the phone
things around to sit down and I tell them
need an item of clothing that once hugged
from LA. She says she is sitting beside
to be really careful, some of those things
the curves of the world’s most famous
a table that once belonged to Marilyn
used to belong to Marilyn.”
Monroe with a book of Jim Morrison
Barrett has good reason to be careful,
In 2011 the LA auction house Profiles
poetry on top of it. “Two of my favourite
celebrity memorabilia is big business and
in History sold Monroe’s famous white
icons together in one place,” she laughs
it doesn’t get any bigger than Monroe. If
‘subway’ dress from The Seven Year Itch Portfolio
Essentials Investment for $5.52 million. It was a new world
mysterious she becomes. You see so many
said to be from Nelson’s Victory. Today
record for a movie costume and shattered
celebrities reinventing her look and so
his collection includes 20 dresses as well
the previous record held by Audrey
many pictures of her everywhere that she
as dozens of other items of memorabilia
Hepburn’s little black dress from Breakfast
doesn’t seem real. I think memorabilia
such as pill boxes found with Monroe
at Tiffany’s sold for $807,000 in 2006.
reminds us that she was a real person.”
when she died and a postcard stating ‘No,
Despite dying tragically of an apparent
I’m not pregnant’. Many of these items are
office, the glamour of Monroe outshines
overdose at the age of 36 in August 1962,
on display at the American Museum in
everyone. Christie’s 1999 $1.2 million
Monroe’s seductivity continues to endure
Britain until 30 October.
auction of the dress she wore to sing
half a century later. “If she had lived she
‘Happy Birthday Mr President’ is still the
would have been 86 in June  but we
also loaned dozens of items from his “six-
most expensive gown every sold. Even for
will never see her ravaged by time,” Monroe
figures-or-more collection” to exhibitions
smaller items the prices are stratospheric.
collector, former wrestling promoter,
dedicated to the star. “My favourite items?
“I recently attended a sale at Julien’s
probation officer and retired investment
I feel particularly protective of items in
and watched in disbelief as a white terry
banker David Gainsborough Roberts says.
my collection that Marilyn considered
robe that belonged to Marilyn sold for
“I’ve probably spent about $450,000 on
favourites when she owned them such
$120,000,” life-long Monroe collector
my collection but it’s worth a gigantic
as a mink fur collar she’s photographed
Scott Fortner tells Portfolio. “In 1999 it
amount now, possibly even $20 million.
wearing several times in 1955 and 1956,”
sold for $18,400.”
But at the time I didn’t buy to sell, I don’t
says Fortner. “I also have items from when
buy to sell anything.”
she was young such as her first camera.”
So what’s behind these incredible prices? “You ask little kids today and they know
Gainsborough Roberts is a flamboyant
Like Gainsborough Roberts, Fortner has
Both collectors source their material
who Monroe is even if they have never
legend in memorabilia circles. He was
from reputable auctions as well as reliable
seen her films,” says Barrett. “I think the
first inspired to collect as a child when his
individual sources. Gainsborough Roberts
further we get away from her life the more
grandmother gave him a piece of wood
says he became friends with Monroe’s
A visitor looks at a 1960 picture of Marilyn Monroe, shot by acclaimed photographer Eve Arnold on the set of The Misfits. It was Monroe’s last movie.
When it comes to the auction house box
masseur Ralph ‘Rafe’ Roberts before he
And new Monroe
died. “He saw her almost every day for
memorabilia is always
three years and was probably one of the
being discovered. No
last people who spoke to Monroe before
matter how insignificant or
she died,” the collector says. “He’s always
bizarre, if an item has been
maintained that she didn’t kill herself and
touched with the magic
that the overdose was a terrible accident.”
dust of Marilyn it’s worth a fortune. American auction
Monroe is also a focus for hero worship
house Julien’s recently sold
from contemporary celebrity collectors.
X-rays of Monroe’s chest
Lindsay Lohan, who recreated Monroe’s
taken in 1954 for $45,000
‘Last Sitting’ Vogue photo session with
and the couch she used to
original photographer Bert Stern for New
sit on when she visited her
York, told the magazine she had bought an
psychiatrist for $2,625. “Can you imagine the
apartment where Monroe once lived and
stories that couch could
filled it with “a lot of Marilyn stuff ”.
tell?” says Darren Julien,
During the landmark sale of Monroe’s estate by Christie’s in 1999, singer Mariah
the company’s CEO,
Carey bought Monroe’s childhood piano for
speaking from Tokyo.
$662,000 (“It belonged to her mother and
“Why am I in Asia? Well,
was a piece of her childhood,” the singer
in China and Japan,
said); Tommy Hilfiger bought a pair of her
there is a fascination with
jeans and boots for $112,000 and Massimo Ferragamo bought back a pair of his company’s red stiletto heels for $42,000. The highlight of the auction, however, was
An authentic autographed picture of Monroe at a memorabilia sale. Monroe’s assistants often signed photos on her behalf.
Western pop culture and plenty of large bidders. The combination of Monroe’s troubled private
the sale of that dress Monroe wore to sing a breathy Happy Birthday to US President John F Kennedy. “The fact that the sale achieved a total of $13.4 million from 576 lots is a reflection of the incredible enduring appeal of Monroe’s legend,” explains Christie’s London memorabilia expert Katherine Williams. “A lot of actresses get lost in the mist of time but Monroe endures whether it’s in Warhol paintings or her association with historic figures, there is no doubt she is an icon.”
“A lot of actresses get lost in the mist of time but Monroe endures whether it’s in Warhol paintings or her association with historic figures, there is no doubt she is an icon.”
Monroe at the 1957 groundbreaking ceremony for the Time & Life Building in New York. Monroe's allure has only grown stronger since her death in 1962. Portfolio
life, her appearance in incredible films, a tragic death and her personal connection to iconic personalities in America’ history from JFK to Joe DiMaggio is an intoxicating celebrity mix. Some celebrities may just be as well known in specific countries. But Monroe, like Elvis or The Beatles, has an international fan base.” So where do you begin if you want to add a few Monroe pieces to your own investment porfolio? “Always start with provenance,’’ Julien warns. “We do not sell anything that we cannot authenticate through photographic evidence or reputable sources. Marilyn had a lot of reUters
assistants and every week we are shown things that are fake. On one occasion we were offered hair curlers that were supposed to be Marilyn’s but they had been manufactured in the 1970s long
Telephone bids are taken at the 1999 Christie’s auction of Monroe’s personal belongings in New York. The dress Monroe wore to sing “Happy Birthday” to President John F. Kennedy sold for $1,267,000.
after her death.” Barrett at Bonhams & Butterfields says the most heart-breaking part of her job is telling would-be sellers that a studio assistant probably signed the ‘Marilyn’ autograph they have just inherited from their grandmother. “There are also people who think you can buy a 1950s fur, add a fake letter of authenticity and sell it for a fortune,” she says. “The good thing about Monroe is that she was photographed every day of her life so it’s comparatively straightforward to check items.” But when a genuine item arrives at an auction house, the sensation is indescribable. “I can remember handling an identity card that once belonged to Monroe and it was a genuine electric thrill,” says Barrett. “Even in an ID picture she looked glamorous.” For Gainsborough Roberts that electricity is overwhelming. “These things are linked to real people, not images in a photograph or actors in a film. The sensation is childlike. I actually own this piece of history! And it’s actually in my reUters
front room! People say that I could have had a holiday for what I paid for an item, but I don’t want a week in France. I want this excitement.” n May 2012
Monroe's personal address book was sold by Julien’s at a 2005 auction. Any item associated with Monroe fetches top dollar.
EvEry city has its hEroEs – people who, for whatever reason, leave an indelible mark. Washington is awash in monuments to past presidents. Paris is studded with plaques honouring luminaries from Joan of Arc and Victor Hugo to Edith Piaf. Yet few cities are in thrall to a single person the way Buenos Aires is to Maria Eva Duarte de Peron. The wife of Juan Peron, who was president of Argentina from 1946 to 1955 and again in 1973-74, Evita, as she was known to her fans, lived in the capital for less than two decades before dying of cancer in 1952, at age 33. One of the most controversial and influential women in the Western world, to her supporters she was a saint-like defender of the poor; to her detractors, an irresponsible spender out for personal glory. Either way, her presence continues to be felt all over Buenos Aires and beyond. WhErE that soNG Was sUNG The Casa Rosada – also known as the Pink House – is the Presidential Palace, home to the balcony that Evita often used to address throngs of Peronists, also known as the shirtless ones because many were poor labourers, who gathered in the Plaza de Mayo and up Avenida de Mayo. It became iconic as the setting for “Don’t Cry for Me Argentina,” the signature song of the musical Evita. Free weekend tours of
© 2012 New York Times News service
the palace allow visitors to peer from the balcony themselves. The Museo del Bicentenario, sometimes called the Presidential Museum, opened in 2011 behind the Casa Rosada. It contains objects related to the Perons, such as presidential regalia, clothing and
Buenos Aires Following in the footsteps of Eva Peron is one way to see the Argentine capital and get a history lesson at the same time, reports Michael Luongo.
campaign posters. Portfolio
Essentials Culture Items for sale in the souvenir shop at the Evita Museum in Buenos Aires. Evita Peron was a controversial figure in Argentinean politics, both loved and despised.
flowers and notes at the tomb nearly every day, and the crowds grow to the thousands on 26 July, the anniversary of her death. On 17 October, the date Juan Peron came to power, the arrangements – many from political leaders and unions – grow in size and number. thE PLacE thEy MEt? Legend has it that Juan Peron first laid eyes on the rising starlet Eva Duarte at a 1944 fundraiser for earthquake victims at the Luna Park concert and sports hall near the Puerto Madero neighbourhood. The moment is marked by the song “Charity Concert” in Evita, though some historians say it is likely that they had already met. EvEN hEr corPsE Was coNtrovErsiaL The General Confederation of Labour (Confederacion General Del Trabajo) is a union office building constructed by the Perons in the late 1940s. Tourists will recognise it by the portrait of Evita on its central tower, lighted by an eternal flame. Her body was embalmed in this building and it lay here until 1955, when a military coup forced Juan Peron from power. (The body was brought FashioNista MUst-stoP
Historical Foundation, including some of
back to Argentina in 1974.) The room
Under Evita’s direction, the Argentine
her early films. The foundation behind the
where the body was embalmed is now a
state bought a mansion in the tony
museum is run by her grandniece, Cristina
Palermo neighbourhood in 1947 and
Nearby is the Fundacion Eva Peron Engineering School. This imposing
turned it into a shelter for single mothers. After Juan Peron was deposed in 1955,
Pay yoUr rEsPEcts
Doric-columned structure was once
the building remained in government
After 24 years of being shuttled about
the headquarters for the Eva Peron
hands as an office for the disabled. In
Argentina and even being buried in Italy
Foundation, which she established to
2002, the 50th anniversary of Evita’s
for a few years, Evita’s body came to rest in
distribute money to needy families – and,
death, the building reopened as the Museo
1976 in the simple black tomb belonging
some say, to draw funds for her personal
Evita showcasing her lavish wardrobe,
to the family of her father, Juan Duarte, in
use. The building bears a tiny plaque that
as well as items from the Eva Peron
the Recoleta Cemetery. Her admirers place
is the sole remnant of its former use.
Eva Peron addresses supporters in 1951. Peron secured the vote for women and organised workers.
WoMEN oNLy, PLEasE
magazine covers, from Evita’s film and
its 97-metre clock tower, is just off the
The grey granite Congress (Congreso)
radio career from the late 1930s to 1945.
Avenida de Mayo, a few blocks from
building is among the most impressive
Visitors might also have the chance to
the Casa Rosada. Though its legislative
neo-Classical-style structures in Buenos
speak to one of the volunteers here who
chambers are still active, the building
Aires. After women gained the right to
actually knew Evita.
maintains one of Evita’s satellite offices
vote in 1947, a wave of female politicians
The City Legislature building, with
for her foundation, which is open to the
came into office. Evita opened the womenonly Salon Rosado, or the Pink Room, so that they could discuss issues important to them without men around. Now called Salon Eva Peron and open to the public, the room bears a plaque explaining its importance, contains a bust of Eva Peron, and has retained its original furnishings. The building’s rotunda was a viewing site during the official two-week mourning period for Evita. oh i coULD tELL yoU storiEs The La Muestra de Evita, which opened in 2009 in a union hall, houses material related to public works from the Peron era as well as objects, like rare photos and old
A steel image of Maria Eva Duarte de Peron on the side of the Ministry of Health Building in Buenos Aires. Portfolio
Essentials Culture public. The room, now called the Salon Eva Peron, contains objects she used. Nearby, see Evita Vive, a tango show celebrating her life, inside the Moreno Hotel Theatre. 10 storEys taLL One of Buenos Aires’ tallest structures, the Ministry of Health was built by the Perons and dominates Avenida Nueve de Julio. Because it was too large to demolish during the 1960s expansion of the avenue, a process that made it the world’s widest boulevard, the road simply goes around it. A stage at the base of this building was the site of a 1951 rally at which the crowd, estimated at two million people, called for Evita to announce her candidacy for vice president. (She decided against it.)
Clementina Beba Gil, who worked on the women’s suffrage campaign with Eva Peron, at El Museo Del Pueblo.
Today, the building is home to the city’s newest Evita monument: two 10-storey images of Evita’s face on the central tower, made of steel. The work on the south facade was unveiled on 26 July, 2011, the 59th anniversary of her death, by President Cristina Fernandez de Kirchner, a former first lady herself who has drawn comparisons with Eva Peron. A defiant Evita on the northern facade harangues the city’s wealthy oligarchs, while on the south facade, facing a poor area, she is smiling. BroNZE GoDDEss There was no official monument to
The Casa Rosada, also known as the Pink House, is the presidential palace and home to the balcony Evita used to address her supporters.
Evita until 1999, when a bronze statue, reminiscent of a 1960s church sculpture, was unveiled. It’s on a hillside below the National Library, which sits at the site of the former presidential residence, where Evita died. (The residence was demolished after the coup.) The statue roughly marks the spot where Juan Peron had planned to build a colossal monument to himself, Evita and a symbolic worker, or Descamisado. After you’ve seen it, have coffee nearby at Un Cafe con Peron inside the presidential archive and research office Instituto Nacional Juan Domingo Peron, where tourists and locals pose with a statue of Juan Peron. n May 2012
Patrons at the outside restaurant of the Evita Museum in Buenos Aires.
WINNING WAYS The Mercedes ML 500 4MATIC BlueEFFICIENCY, now in its third generation, is back better than ever, reports Guido Duken.
WAS ACTUALLY EXPECTING some
experiencing year on year growth since
The thick, sharply angled C-pillar is carried
tire-burning action in the C63, but
2008, and 2011 was the best yet in terms
through from the second generation. Weight
Mercedes requested that I rather test
of sales. For the 2012 model year, the
has also been targeted, with aluminium
the brand new ML 500 4MATIC. “You’ll
M-Class enters its third generation and
replacing the fenders and engine hood that
be the first journalist to drive it in the
while the revisions may appear minor, they
were previously steel.
UAE,” the PR person assured me. OK,
are aimed at keeping this SUV at the top
luxury SUV it was.
of its game against competitors such as the
THE MOST dramatic changes Mercedes
BMW X5, Audi Q5 and Cadillac SRX.
has made in its latest vehicles are the
When it comes to Mercedes’ SUVs, the compact GLK is the C-Class of the line up,
Externally, the new ML has undergone
upgraded interiors. The ML’s interior
the ML mirrors the mid-range E-Class,
some subtle changes. Firstly, it’s marginally
is a mix of old and new – the radio,
while the GL is the equivalent of the top-
longer and wider, and the stance has been
HVAC controls and central COMMAND
of the range S-Class sedans. Naturally, this
lowered slightly. The swept-back headlamps,
screen are familiar, but the rest of the
is also reflected in the price tag.
LED running lights and wide rear arches
gauges, seats and controls are new. Like
from Mercedes’ latest sedans and coupes is
the exterior, the cabin shares many
back in 1998 and has been a major
incorporated. The front gets the new bold,
themes with the E-Class sedan, but
sales success for Mercedes-Benz. In the
upright family grille, the waistline has been
the materials are first rate. Soft-touch
Middle East, the outgoing ML has been
raised and 19-inch wheels are standard.
plastics and leathers mix well with
The first-generation M-Class debuted
The ML 500’s swept-back headlamps, LED running lights and wide rear arches have been carried over from Mercedes’ latest sedans.
The interior of the ML 500 is a mix of old and new. The radio, HVAC controls and central COMMAND screen are familiar friends, but the rest of the gauges, seats and controls are new.
chrome. The front seats adjust in many different ways, and the rear seats plus
14-speaker Harmon Kardon stereo. The ML 500 might be well insulated,
The ML 500’s stance has been slightly lowered and the waistline has been raised, while 19-inch wheels are standard.
Coming around a corner I suddenly hit a sizeable patch of sand, but the ML 500
the cargo area are more spacious than
but it’s definitely not soulless. When
didn’t even feel it. Those 19-inch tires and
before – the 2,010 litres of boot space
you step on the accelerator the V8 4.6-
permanent all-wheel-drive just ploughed
is actually the best in the segment.
litre engine emits a pleasant soundtrack
right through. In those conditions I was
that underlines the 300kW it delivers
happy to have Mercedes’ safety equipment
does listen to its customers, the indicator
between 5,000 – 5,750rpm and 600Nm
on board. The standard equipment
signal stalk has been swapped with the
of torque. The ML 500 is definitely
package includes the drowsiness detection
cruise control stalk.
no slouch as it hits 0-100km/h in 5.7
system ATTENTION ASSIST, the
seconds, yet it uses around 25 per
anticipatory safety system PRE SAFE
cent less fuel than its predecessor.
and a tyre pressure loss warning system,
And just to prove that Mercedes-Benz
THE DAY I picked up the ML 500 a sandstorm was raging across Dubai,
It’s comfortable as well. The sandstorm
reducing visibility and creating mini
could do its worst, but inside I was nicely
Brake Assist (BAS). The optional active
dunes on the roads. A good day to stay
cocooned against the elements. The
assistance systems such as Active Lane
home. But if you do have to be on the
suspension eats up most bumps with
Keeping Assist and Active Blind Spot
road, the ML 500 is a good vehicle to
quiet efficiency, cornering is stable and
Assist where fitted to my test vehicle, and
be in. Wind or no wind, the ML 500 is
this SUV drives more like a sedan. The
I think they’re worth the money.
amazingly quiet. Thicker windshield glass,
steering feels good at high speeds, but it
new door seals, and sound-absorbing
seems a bit sloppy when you’re going slow.
up where its predecessors left off. Better
panels make this the quietest-riding
The ML now uses electric assistance for
comfort, more space, improved looks and
M-Class yet. At freeway speeds, road noise
its power steering, which doesn’t quite
increased fuel efficiency combined with
is subdued and wind noise only becomes
provide the feedback that the hydraulic
driveability and safety make the ML 500 a
audible when speeds approach triple
pump systems did. Mind you, the new
wise and entertaining choice. Prices start
digits. Not that this worried me as I was
Porsche 911 gets it right, so there’s room
at $73,200, but the option-packed model
busy cranking up the optional 610-watt,
I drove hit the $100,000 mark. n
as well as adaptive brake lights and
The third generation ML 500 picks
Cash Mobs Latest Craze Flash Mobs have been around for a while, but now a group of online activists is harnessing social media like Twitter and Facebook to get consumers to spend at locally owned stores in cities around the world in so-called Cash Mobs. At the first International Cash Mob day last month, wallet-toting activists gathered in as many as 200 mobs in the United States and Europe, with the aim of spending at least $20 a piece in locally owned businesses, according to the concept’s founder, Cleveland lawyer Andrew Samtoy. The 32-year-old dreamed up the Cash Mob idea last year after spending time in Britain during summer riots that unleashed looting in cities including London, Manchester and Birmingham. His first Cash Mob, in Cleveland last November, brought around 40 shoppers packing in to the Visible Voice book shop, on a welcome spree in which each of them spent on average $40 within an hour-
Expensive Penny Withdrawn
and-a-half. After the original Cash Mob in Cleveland, Samtoy’s Facebook friends in other cities picked up on the idea and organised their own gatherings. According to Samtoy there are only three rules: “You have to spend at least $20, meet three people you never met before and have fun.”
Canada is withdrawing the penny from circulation this year, saving taxpayers about C$11 million ($11 million) annually and forcing retailers to round prices to the nearest nickel (five cents). It costs the government 1.6 cents to produce one penny, which has been made of copper-plated zinc and copper-plated steel since 1997. The Royal Canadian Mint, which has produced 35 billion pennies since it began production in 1908, will cease power. Production and handling cost for the one-cent
Driven to Fly
coin are a C$150-million drag on the economy, according
The flying car has escaped the realm of science fiction,
to a 2006 study by Desjardins, a Levis, Quebec-based
according to the US company Terrafugia. The vehicle –
dubbed the Transition – completed its first test in March.
distribution this autumn due to the coin’s low purchasing
Business groups welcomed the move, which follows other countries such as Australia, Brazil and Sweden, and economists said it would have little impact on inflation. The savings to financial institutions alone may be about
The Transition reached 500 metres altitude and flew for eight minutes. The Transition has two seats, four wheels and wings that fold up so it can be driven like a car. Around 100 people have
C$20-million a year, as banks reduce transportation,
already put down a $10,000 deposit to get a Transition when
storage and handling costs.
they go on sale. But don’t expect it in too many driveways as it’s
The mint used 1.5 million kilograms of steel, 70,000 kilograms of copper and 23,000 kilograms of nickel last
expected to cost $279,000. As the Transition needs a runway, it won’t allow you to escape when you’re stuck in traffic.
year to make pennies at its facility in Winnipeg, Manitoba.
Terrafugia has been working on flying cars since 2006.
It put 1.3 billion coins in circulation in 2011, half of which
The Transition uses standard automotive fuel and can reach
were freshly minted and half made from recycled materials.
180km/h in the air and 110km/h on the highway.
rotonde de cartier MINUTE REPEATER FLYING TOURBILLON 9402 MC
CERTIFIED WITH THE GENEVA HALLMARK, THE CALIBRE 9402 MC DE CARTIER BRINGS TOGETHER TWO OF THE MOST PRESTIGIOUS AND COMPLEX HIGH COMPLICATIONS: THE MINUTE REPEATER AND THE FLYING TOURBILLON. WITH A SINGLE PRESS OF THE LATERAL BUTTON THE MINUTE REPEATER ACTIVATES TWO HAMMERS VISIBLE ON THE WATCH DIAL THAT CHIME, INDICATING RESPECTIVELY THE HOUR, THE QUARTER HOUR AND THE MINUTES DISPLAYED BY THE HANDS. THE CHIMING IS REGULATED BY AN INERTIAL FLYWHEEL, VISIBLE AT SIX O’CLOCK, THAT MAKES ALMOST 1000 TURNS A MINUTE. REFINED BY THE ABSENCE OF A BRIDGE ACROSS THE DIAL, THE FLYING TOURBILLON APPEARS TO FLOAT AT THE HEART OF THE WATCH, CREATING A UNIQUE VISUAL EFFECT. TITANIUM CASE, POLISHED CROWN SET WITH A CABOCHON SAPPHIRE, MECHANICAL MANUFACTURE MOVEMENT, MANUAL WINDING, MINUTE REPEATER FLYING TOURBILLON CALIBRE 9402 MC, GENEVA HALLMARK-CERTIFIED, (45 JEWELS, 447 PARTS, 21,600 VIBRATIONS PER HOUR, DOUBLE-BARREL, APPROXIMATELY 50 HOUR POWER RESERVE), MINUTE REPEATER WITH FLYWHEEL, HAMMERS AND GONGS VISIBLE ON THE DIAL SIDE, FLYING TOURBILLON WITH C-SHAPED CARRIAGE.
FROM UAE: 800 CARTIER (800-2278437) OUTSIDE UAE: +971 4 236 8345