Trials and tribulations

FINANCE & ECONOMICS
Spanish banks

Jan 20th 2005 MADRID
From The Economist print edition

The bosses of Spain's two biggest banks are under fire

LAST year was a good one for Santander Central Hispano (SCH) and Banco Bilbao Vizcaya Argentaria (BBVA). Spain's two biggest banks did well at home and in Latin America, and SCH bought Britain's Abbey, in Europe's biggest cross-border bank merger. This year is starting less well, in particular for the two banks' bosses.

Emilio Botín, chairman of SCH, is due to stand trial twice. In the first trial, which is due to open next week, Mr Botín is accused of misappropriating funds by giving severance packages totalling €164m ($145m) to two former executives of Banco Central Hispano Americano, which merged with Mr Botín's Banco Santander in 1999. The deal ended a bitter power-struggle and made Mr Botín sole master of the newly created SCH. The date of the second trial, in which he is accused of falsifying documents to help clients to evade taxes in the late 1980s, has not been set. Mr Botín denies all charges in both cases.

Unusually, Spain allows private criminal prosecutions. The two facing Mr Botín are among 26 brought against him or his bank by an association of shareholders led by one Rafael Pérez Escolar. They are set to be the first to come to court. Spain's state prosecutor and attorney-general have tried to have them dismissed, as others in the series have been. Mr Escolar was an executive of Banco Español de Crédito (Banesto), a retail bank which collapsed in 1994 before being bought by Banco Santander. He was jailed for his part in Banesto's troubles.

Despite his legal headaches, Mr Botín has done a good job. When he took over from his father in 1986, Banco Santander was a small regional bank. Its takeovers have turned it into the euro area's biggest by market capitalisation.

Mr Botín's SCH is now working hard to make its latest purchase, of Abbey, pay. To replicate its sales-oriented model in Britain, it will cut back-office jobs and train Abbey staff to become better salespeople. SCH's executives were surprised that a lot of Abbey's products were sold by independent advisers, not by bank staff. Mr Botín predicts that SCH's net income in 2004 will have exceeded €3 billion, up by 15% from 2003.

Francisco González Rodríguez, chairman of BBVA, is the probable target of a construction company's plan to build a stake in his bank. Mr González's tormentor, Sacyr Vallehermoso, says it wants to become BBVA's biggest shareholder—not a tall order, given that no one now has a stake of more than 1%. Luis del Rivero, Sacyr's boss, claims he can buy 3.1% of BBVA's shares and control even more through alliances with other investors. To be entitled to a board seat, a shareholder must own at least 6.25%.

Sacyr has allies. The bank is based in the Basque country; and members of Basque families have held grudges against Mr González since he sacked them from the bank's board after a scandal over secret offshore accounts in 2002. Socialist politicians dislike him because of his close ties to the previous, conservative government. Recent comments by Pedro Solbes, the finance minister, suggest that the government favours Sacyr. Nevertheless, Mr González's detractors are unlikely to muster the strength to oust him.

Like Mr Botín, Mr González has been winning high marks from analysts. BBVA's profits are expected to have risen by one-fifth or more in 2004. The bank, which focuses on Spain and Mexico, made three clever acquisitions last year: a buy-out of minority shareholders of Bancomer, a big Mexican bank; a takeover of Laredo National, a Texan bank; and the purchase of Hipotecaria Nacional, a Mexican mortgage company. Davide Serra, an analyst at Morgan Stanley, reckons that all three will increase earnings per share.

Both Mr Botín and Mr González would like to buy abroad again, especially in Italy. SCH fancies Sanpaolo IMI, Italy's third-biggest bank by assets, of which it owns 8.6%. BBVA has been trying to buy Banca Nazionale del Lavoro, the number six, for four years. It already owns 15%, and controls almost one-third through a pact with two other shareholders. Both Spanish suitors are waiting for Antonio Fazio, the governor of the Bank of Italy, to drop his opposition to takeovers by foreigners. A hostile takeover is not the way to go about acquiring Sanpaolo IMI, says a senior executive at SCH. Despite their tribulations, Mr Botín and Mr González will be keen to pounce should they get the chance to buy.

Copyright © 2005 The Economist Newspaper and The Economist Group. All rights reserved.

Scents and sensibility

BUSINESS
The perfume business

Jan 20th 2005 HONG KONG AND PARIS
From The Economist print edition

Hutchison Whampoa is buying a troubled French perfume retailer

IT IS the end of a French success story. Twenty-one years ago Marcel Frydman launched Marionnaud after buying his first parfumerie in Montreuil. The firm became Europe's largest perfume chain, with 1,231 shops in 15 countries. Then last year it ran into difficulties, and Mr Frydman decided to seek a buyer. On January 14th, he found one. A.S. Watson, a manufacturing and retailing subsidiary of Hutchison Whampoa, a Hong Kong-based conglomerate controlled by Li Ka-shing, struck a deal to buy Marionnaud.

Mr Li will now be the world's biggest perfume retailer. This billionaire's firm already owns eight health-and-beauty chains with more than 4,500 shops in 19 countries. Its focus is the low end of the market, using mass-market brands such as Superdrug in Britain, Kruidvat in the Netherlands and Belgium, and Watsons in Asia. Through Marionnaud, he hopes to add French glamour to such drab offerings. Marionnaud is the market leader at home with a 30% share. It also has big chunks of the Italian, Spanish and Swiss markets.

Yet Mr Li may be underestimating Marionnaud's troubles. At the end of December Mr Frydman admitted to taking a €93m ($120m) charge to cover accounting errors in 2002-03. On January 11th the AMF, France's markets watchdog, suspended trading in Marionnaud shares and opened an investigation into the group's accounts. Marionnaud's debts are high. Mr Li is paying €534m for Marionnaud, as well as taking over €350m in debt and an estimated €350m in off-balance-sheet liabilities, such as rent for shops.

Many of Marionnaud's subsidiaries outside France are leaking money. Only its Austrian operation makes healthy profits. Even at home, Marionnaud expanded too quickly. There are two or even three Marionnaud shops, often only a stone's throw apart, in some commercial streets in France. It would make sense to shut one in three Marionnaud shops in France, says Olivier de Combarieu of Fitch, a credit-rating agency—but the unions would fight it.

Mr Li wants Marionnaud to take on Sephora, a perfume and cosmetics chain owned by Louis Vuitton Moët Hennessy (LVMH), a group of several dozen luxury-goods companies. Sephora, known for its trendy interior and even cooler assistants, has been something of a financial flop for Bernard Arnault, boss of LVMH, though things have improved lately. Ian Wade, managing director of A.S. Watson, believes that his firm can add some of Sephora's panache to Marionnaud, but do it more efficiently. Sephora's financial problems partly stem from its expensive store fittings and pricey brands. Mr Wade plans to cut such costs at Marionnaud by shipping in fittings such as ceilings and floorboards cheaply from China.

Hutchison's ambitions are even bigger for mainland China, where it has 100 drug stores and no upmarket brands. It plans to open some 1,000 shops there by 2010. Marionnaud could be the focus of that expansion, offering a way into China's booming cosmetics market—with sales forecast to rise over 50% by 2010. But first the new owners must sort out the French group's financial woes and get rid of the bad odour coming from its accounts.

Copyright © 2005 The Economist Newspaper and The Economist Group. All rights reserved.

Clearer signal

BUSINESS
Business in Japan

Jan 20th 2005 TOKYO
From The Economist print edition

Fuji TV awards another victory to Japan's active investors

IN JAPAN, where cross-shareholdings and wacky ownership structures abound, any progress towards common-sense capitalism surely warrants cheers. The pace at Fuji TV, it must be admitted, has been a lot slower than the Formula 1 races that it regularly broadcasts to Japanese viewers. But on January 17th, Fuji TV finally announced a tender offer that will tidy up its cross-holding arrangement with Nippon Broadcasting System (NBS), a radio broadcaster, and take NBS under its wing as a normal subsidiary. This plan should help Fuji TV to resolve a long-running argument with investors, and hopefully allow it to focus more attention on its strategy as digital broadcasting spreads in Japan.

Other investors have complained for the past couple of years about the 22.5% stake that NBS holds in Fuji TV. Until recently, that stake was worth more than NBS's market capitalisation, implying that the rest of the NBS business had negative value. One investor who saw an opportunity was Yoshiaki Murakami, a former bureaucrat who now heads M&A Consulting (MAC), an investment outfit that has found easy pickings among wasteful cash-rich firms. MAC started buying NBS shares in 2003, eventually becoming its largest investor with an 18.6% stake, then badgered the two firms to resolve their cross-holding mess.

Fuji TV, which already owns 12.4% of NBS, will pay a 21% premium to buy (at least) a majority stake. It will issue ¥73 billion ($710m) in convertible bonds—it says, to help finance the deal. “We are basically happy,” says Kenya Takizawa, a partner of Mr Murakami at MAC.

But some of Fuji TV's investors are cautious. They are not sure why Fuji TV needs to issue new debt, especially bonds that could dilute their ownership. They also want to see if the firm will improve its business, now that it has cleaned up its finances, or whether buying off Mr Murakami will instead prove to be a case of unproductive greenmail.

Fuji TV launched some successful new dramas last year, and Masaru Ohnishi, a media analyst at J.P. Morgan, points out that it was Japan's ratings leader in all three main time segments. It is still looking for new ways to combine content from different bits of its media group, however, and is hoping to meet a growing demand for digital content in Japan, including high-definition broadcasting and content for video-equipped mobile phones. Mr Ohnishi reckons that Fuji TV will now be able to do more with Pony Canyon, an NBS subsidiary that distributes DVDs of Fuji TV's dramas, movies and other content.

Copyright © 2005 The Economist Newspaper and The Economist Group. All rights reserved.

Fighting talk

FINANCE & ECONOMICS
The London Stock Exchange

Jan 20th 2005
From The Economist print edition

The LSE's two suitors spark a debate over market structure

ACCORDING to an online betting exchange, the odds against the London Stock Exchange (LSE) remaining independent have widened to eight to one. Deutsche Börse, a German exchange group, made a takeover proposal in December; Euronext, the product of mergers among the Amsterdam, Brussels, Lisbon and Paris exchanges, was quick to follow. Neither suitor has yet made a formal bid, but the LSE is in talks with both. The online bookies make Euronext the slight favourite.

Not all the would-be buyers' shareholders are happy. TCI, a hedge fund which says it has bought more than 5% of Deutsche Börse's stock, has called for the German exchange to buy back shares rather than overpay for the LSE. This is unlikely to worry Werner Seifert, Deutsche Börse's pipe-smoking, organ-playing chief executive: TCI would need to have owned its stake for three months to call a shareholders' vote. However, TCI's needling has exposed a weakness in Deutsche Börse's corporate governance. Its supervisory board, drawn mainly from the big banks that controlled it before its flotation in 2001, can hardly be said to represent the current, wider ownership. A small minority of Euronext shareholders also fears that their company's management might pay too much.

But many believe that the future ownership and governance of the London Stock Exchange may be too important to be left to shareholders alone, and that regulators will have to get involved. “This is about market organisation,” says a protagonist in the talks. Broadly there are two camps: those who argue that stock exchanges should not own or control entities that clear and settle trades, and those who argue that ownership does not matter, as long as each stage is open to competition.

Deutsche Börse, which owns clearing and settlement operations, is often seen as the more monopolistic, and Euronext, which does not, as the more customer-friendly. In fact both groups' clearing and settlement arrangements leave room for oligopolistic pricing. For example, some bigger members of the exchanges carry out internal or block trades without revealing prices. They also benefit most from offsetting buy and sell orders with a central counterparty, without obviously passing their savings on to customers.

Developments at the LSE, too, have not always been for the general good. Indeed, the introduction of a central counterparty has increased trading costs for some of the exchange's smaller members. Apcims, a British association of brokers and investors, has told the LSE that the merger must produce cost reductions in this area.

So national and European regulators will have to be keen-eyed, no matter who buys the LSE. The European Commission is well behind schedule in drafting a clearing and settlement directive that might have helped in this merger battle. The papers published so far avoid favouring any particular market structure. A group of clearing and settlement experts is not expected to give the commission its analysis of the regulatory implications of different market arrangements until September.

As a consequence, no one is sure what the future regulation of Europe's securities exchanges, clearing houses and central securities depositories will look like. The arguments being deployed in the fight for the LSE, both by the prospective purchasers and by other interested groups, are to some extent intended to push the market structure and its regulation one way or the other. The outcome of this debate will set the rules for what some see as the final stage. Whoever wins the LSE, it may only be a matter of time—five years, say some—before the three main exchange groups have merged into one.

Copyright © 2005 The Economist Newspaper and The Economist Group. All rights reserved.

Beyond Janet Jackson's breast

BUSINESS
Face value

Jan 20th 2005
From The Economist print edition

The case for Michael Powell, America's controversial media and telecoms regulator

BY ALL rights, Michael Powell ought to be thoroughly fed up. As head of the Federal Communications Commission (FCC), a regulator whose reach spans telecoms, media, the internet and everything in between, Mr Powell has endured one mortifying policy defeat after another. From a battle over America's media-ownership rules to a scrap about telecoms regulation, the courts, Congress, the media and even fellow Republican commissioners have taken turns sticking the knife into the FCC's soft-bellied chairman. Yet fresh from the ritzy Consumer Electronics Show in Las Vegas, Mr Powell seems as full of zest for public office as ever. Broadband internet use is spreading at “triple-digit rates”, he gushes. New sorts of digital content and communications services proliferate. Super-cheap, off-the-shelf internet phone services—called voice over internet protocol (VOIP)—are “very for real”. In short? America's digital revolution marches on.

Mr Powell's critics would counter that much of this onward marching is taking place in spite of the FCC's best efforts to impede it. Even his friends would admit that FCC policy has become oddly fluid under Mr Powell's stewardship. The agency's deregulation in June 2003 of America's media-ownership rules (which limit the freedom of firms with public-broadcasting licences to buy other media companies) got partially reversed by Congress (in December 2003), and then put on ice altogether by the courts (in June 2004). Mr Powell must now decide whether to appeal that ruling to the Supreme Court. Americans still await the publication of long-promised rules governing how telecoms firms may compete with each other in the market for local services. The courts struck down an earlier effort at rulemaking (passed despite Mr Powell's own opposition to his agency's new rules) last year. An FCC ruling exempting cable companies from the sort of regulatory micromanagement that telecoms firms must endure is also under judicial attack. Only the FCC's zealous crusade against indecency over the public airwaves has appeared to work for Mr Powell, as it has taken on offenders from radio-host Howard Stern to Bono and Janet Jackson's errant breast (so disturbing to some viewers of last year's Super Bowl).

Mr Powell, whose second (and most probably final) five-year term expires in 2007, amiably waves away these trifling setbacks. Last month, three of the FCC's five commissioners agreed to a new set of local telecoms rules, he points out. (This time, Mr Powell was among them.) The details should be out soon. As for his media-rules upset, Mr Powell maintains that he was right, but “too early”. New sorts of media are proliferating in America. Satellite radio, cable-TV and internet bloggers continue to undermine the legitimacy of the existing set of unduly restrictive ownership rules written when network-TV stations and radio companies dominated scarce broadcasting spectrum, he argues. Who can deny the influence of the blogosphere on America's presidential election last year, or the growing clout of satellite radio? Yet Mr Powell also has a bigger point to make about the Sturm und Drang at the FCC under his leadership. And it is in the context of this larger point that his real legacy may lie.

America's telecoms policies are built on a landmark antitrust ruling in 1984 which broke the AT&T monopoly into a long-distance carrier and several local “Baby Bell” operating companies. The authors of the 1996 Telecoms Act continued to pay homage to this local/long-distance distinction. Mr Powell's rulemaking last month marked the FCC's latest attempt to broker a settlement between the industry's two warring halves. In applying the 1996 act, the FCC has sought to make extra distinctions between different forms of transmission (copper telephone wire, cable TV, satellite, wireless) and of content (telephone calls, television, data). But the spread of digital technology is making all such distinctions moot. Cable-TV firms carry telephone and internet traffic over their digital networks. Wireless operators pipe e-mail and stream television broadcasts. Baby Bell telephone companies such as Verizon, meanwhile, are preparing to enter the television market. “Isn't everything broadband internet attached to some sort of appliance or device?” asks Mr Powell.

Moralising, up to a point

Mr Powell is equally irreverent about the way the FCC regulates America's media industry. Even as he attacks indecency over the public airwaves, Mr Powell is the first to admit that his policies lack coherence. As it is not broadcast over the publicly-owned radio spectrum, content on cable TV, satellite radio and the internet escapes the FCC's indecency rules. A true zealot (such as Michael Copps, a Democratic FCC commissioner whose ardour on the indecency issue may have forced Mr Powell's hand) would press to bring these other sorts of broadcasters under the FCC's rules as well. Mr Powell rejects this, sticking pointedly to highlighting the regulatory incongruity.

Someone more concerned about politics might have ducked such uncomfortable realities—as Mr Powell's predecessors did. The local-telecoms competition rules that the FCC wrestled with last month had been rejected no less than three times by the courts before Mr Powell got to them. Despite their ancient provenance (and many legal challenges) the FCC's media rules remained unreformed until Mr Powell took an interest. He has tried to inject a dose of reality into the closed world of Washington policymaking. The result may have been messy and chaotic. But it has also opened minds. Calls are growing louder in Congress for a new telecoms act that recognises the reality of the digital revolution—though not even enthusiasts expect one anytime soon. (Meanwhile, Mr Powell is doing his best to protect new technologies such as VOIP from the old rules.) If Mr Powell's legacy is to accelerate the passage of new legislation, Americans ought to remember him fondly and with respect. The 1996 act barely mentions the internet. It shows.

Copyright © 2005 The Economist Newspaper and The Economist Group. All rights reserved.

Greener than you thought

SCIENCE & TECHNOLOGY

GM crops

Jan 20th 2005
From The Economist print edition

Genetically modified sugar beet is good for the environment

THOUGH often conflated in the public mind, arguments against the planting of genetically modified (GM) crops fall into two distinct groups. One, which applies only to food crops, is that they might, for some as yet undemonstrated reason, be harmful to those who eat them. The other, which applies to them all, is that they might be bad for the environment.

Proponents of the technology counter that in at least some cases GM crops should actually be good for the environment. Crops that are modified to produce their own insecticides should require smaller applications of synthetic pesticides of the sort that Greens generally object to. But in the case of those modified to resist herbicides the argument is less clear-cut. If farmers do not have to worry about poisoning their own crops, environmentalists fear, they will be more gung-ho about killing the wild plants that sit at the bottom of the food chain and keep rural ecosystems going—or weeds, as they are more commonly known.

Research just published in the Proceedings of the Royal Society suggests, however, that it may be possible for all to have prizes. Get the dose and timing right and you can have a higher crop yield and a higher weed yield at the same time—and also use less herbicide.

The research was done at Broom's Barn Research Station in Suffolk, by a team led by Mike May, the head of the station's weeds group. The team was studying GM sugar beet. This was one of the species examined in the British government's Farm-Scale Evaluations (FSEs) project, a huge, three-year-long research programme designed to assess the effects (including the environmental effects) of herbicide use on GM crops.

The results for sugar beet, which competes badly with common weed species and thus relies heavily on the application of herbicides for its success, came in for particular criticism from environmentalists when the trials concluded in 2003. They indicated that fields planted with GM beet and treated with glyphosate, the herbicide against which the modification in question protects, had fewer weeds later in the season. These produced fewer seeds and thus led to reduced food supplies for birds. Some invertebrates, particularly insects, were also adversely affected.

The Broom's Barn researchers, however, felt that this problem might be overcome by changing the way the glyphosate was applied. They tried four different treatment “regimes”, which varied the timing and method of herbicide spraying, and compared them with conventional crop-management regimes such as those used in the FSEs.

The best results came from a single early-season application of glyphosate. This increased crop yields by 9% while enhancing weed-seed production up to sixteen-fold. And, as a bonus, it required 43% less herbicide than normal. Genetic modification, it seems, can be good for the environment, as well as for farmers' pockets.

Copyright © 2005 The Economist Newspaper and The Economist Group. All rights reserved.

Antarctica, Warming, Looks Ever More Vulnerable

January 25, 2005

By LARRY ROHTER

OVER THE ABBOTT ICE SHELF, Antarctica - From an airplane at 500 feet, all that is visible here is a vast white emptiness. Ahead, a chalky plain stretches as far as the eye can see, the monotony broken only by a few gentle rises and the wrinkles created when new sheets of ice form.

Under the surface of that ice, though, profound and potentially troubling changes are taking place, and at a quickened pace. With temperatures climbing in parts of Antarctica in recent years, melt water seems to be penetrating deeper and deeper into ice crevices, weakening immense and seemingly impregnable formations that have developed over thousands of years.

As a result, huge glaciers in this and other remote areas of Antarctica are thinning and ice shelves the size of American states are either disintegrating or retreating - all possible indications of global warming. Scientists from the British Antarctic Survey reported in December that in some parts of the Antarctic Peninsula hundreds of miles from here, large growths of grass are appearing in places that until recently were hidden under a frozen cloak.

"The evidence is piling up; everything fits," Dr. Robert Thomas, a glaciologist from NASA who is the lead author of a recent paper on accelerating sea-level rise, said as the Chilean Navy plane flew over the sea ice here on an unusually clear day late in November. "Around the Amundsen Sea, we have surveyed a half dozen glaciers. All are thinning, in some cases quite rapidly, and in each case, the ice shelf is also thinning."

The relationship between glaciers (essentially frozen rivers) and ice shelves (thick plates of ice protruding from the land and floating on the ocean) is complicated and not fully understood. But scientists like to compare the spot where the "tongue" of a glacier flows to sea in the form of an ice shelf to a cork in a bottle. When the ice shelf breaks up, this can allow the inland ice to accelerate its march to the sea.

"By themselves, the tongue of the glacier or the cork in the bottle do not represent that much," said Dr. Claudio Teitelboim, the director of the Center for Scientific Studies, a private Chilean institution that is the partner of the National Aeronautics and Space Administration in surveying the ice fields of Antarctica and Patagonia. "But once the cork is dislodged, the contents of the bottle flow out, and that can generate tremendous instability."

Glaciologists also know that by itself, free-floating sea ice does not raise the level of the sea, just as an ice cube in a glass of water does not cause an overflow as it melts. But glaciers are different because they rest on land, and if that vast volume of ice slides into the sea at a high rate, this adds mass to the ocean, which in turn can raise the global sea level.

Through their flights over this and other areas of Antarctica, NASA and the Chilean center hope to help glaciologists and other scientists interested in climate change understand what is taking place on the continent and why. To do that, they need to compile data not only on ice thicknesses but also the underlying geology of the region, information that is most easily obtained from the air.

The flights are taking place aboard a Chilean Navy Orion P-3 plane that has been specially equipped with sophisticated instruments. The devices include a laser-imaging system that shoots 5,000 pulses of light per second at the ground to map the ice surface, as well as ice-penetrating radar to determine the depth of the ice sheets, a magnetometer and digital cameras.

For most parts of Antarctica, reliable records go back less than 50 years, and data from satellites and overflights like the ones going on here have been collected over only the past decade or so. But that research, plus striking changes that are visible to the naked eye, all point toward the disturbance of climate patterns thought to have been in place for thousands of years.

In 1995, for instance, the Larsen A ice shelf disintegrated, followed in 1998 by the collapse of the nearby Wilkins ice shelf. Over a 35-day period early in 2002, at the end of the Southern Hemisphere summer, the Larsen B ice shelf shattered, losing more than a quarter of its total mass and setting thousands of icebergs adrift in the Weddell Sea.

"The response time scale of ice dynamics is a lot shorter than we used to think it was," said Dr. Robert Bindschadler, a NASA scientist who is director of the West Antarctic Ice Sheet Initiative. "We don't know what the exact cause is, but what we observe going on today is likely to be what is also happening tomorrow."

Thus far, all of the ice shelves that have collapsed are located on the Antarctic peninsula. In reality a collection of islands, mountain ranges and glaciers, the peninsula juts northward toward Argentina and Chile and is "really getting hot, competing with the Yukon for the title of the fastest warming place on the globe," in the words of Dr. Eric Steig, a glaciologist who teaches at the University of Washington.

According to a recent study published in Geophysical Research Letters, the discharge rate of three important glaciers still remaining on the peninsula accelerated eightfold just from 2000 to 2003. "Ice is thinning at the rate of tens of meters per year" on the peninsula, with glacier elevations in some places having dropped by as much as 124 feet in six months, the study found.

But the narrow peninsula contains relatively little inland ice. Glaciologists are more concerned that they are now beginning to detect similar signs closer to the South Pole, on the main body of the continent, where ice shelves are much larger - and could contribute far more to sea level changes. Of particular interest is this remote and almost inaccessible region known as "the weak underbelly of West Antarctica," where some individual ice shelves are as large as Texas or Spain and much of the land on which they rest lies under sea level.

"This is probably the most active part of Antarctica," said Dr. Eric Rignot, a glaciologist at the Jet Propulsion Laboratory in Pasadena, Calif., and the principal author of the Geophysical Research Letters paper. "Glaciers are changing rapidly and increasingly discharging into the ocean, which contributes to sea level rise in a more significant way than any other part of Antarctica."

According to another paper, published in the journal Science in September, "the catchment regions of Amundsen Sea glaciers contain enough ice to raise sea level by 1.3 meters," or about four feet. While the current sea level rise attributable to glacier thinning here is a relatively modest 0.2 millimeters a year, or about 10 percent of the total global increase, the paper noted that near the coast the process had accelerated and might continue to do so.

As a result, the most recent flights of NASA and the Chilean center have been directed over the Thurston Island and Pine Island zones of West Antarctica, near the point where the Bellinghausen and Amundsen Seas come together. The idea is to use the laser and radar readings being gathered to establish a base line for comparison with future measurements, to be taken every two years or so.

"We're not sure yet how to connect what we see on the peninsula with what we observe going on further south, but both are very clearly dramatic and dynamic events," Dr. Bindschadler said. "On the peninsula, large amounts of melt water are directly connected to disintegration of the ice shelf, but the actual mechanism in West Antarctica, whether melt water, a slippery hill or a firmer bedrock, is not yet clear. Hence the need for more data."

The information being gathered here coincides with the recent publication of a report on accelerating climate change in the Arctic, an area that has been far more scrutinized than Antarctica. That study, commissioned by the United States and seven other nations, found permafrost there to be thawing and glaciers and sea ice to be retreating markedly, raising new concerns about global warming and its impact.

"The Arctic has lots of land at high latitudes, and the presence of land masses helps snow melt off more quickly," said Dr. Steig. "But there's not a lot of land to speak of in the high latitudes of the Southern Hemisphere," making the search for an explanation of what is going on here even more complicated.

The hypotheses scientists offer for the causes of glacier and ice shelf thinning in Antarctica are varied. Rising air, land and ocean temperatures or some combination of them have all been cited.

Some scientists have even proposed that a healing of the seasonal ozone hole over the South Pole and southernmost Chile, a phenomenon expected to take place in the next 50 years or so, could change the circulation of the atmosphere over the frozen continent in ways that could accelerate the thinning of Antarctic ice fields. But even without that prospect, the situation developing in Antarctica is already sobering, glaciologists agree. The data being collected here in West Antarctica and on the peninsula farther north make that obvious, they say, though the degree to which that should be cause for concern around the rest of the planet will become clear only with more research.

"If Antarctica collapses, it will have a major effect on the whole globe," Dr. Rignot cautioned. He warned that "this is not for tomorrow, and Antarctica is such a big place that it's important to look at other areas" around the perimeter of the giant continent, but added, "Nature is playing a little experiment with us, showing us what could happen if the plug were to be removed."

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DUBAI BRIEFING February 2005

News this month

Soaring

Dubai will begin work in February on a massive second airport, boasting six runways and capacity for 120m travellers a year. The project had been on hold for years, and work was not due to begin for another decade. But with traffic mounting at the existing airport, the government said it will fast-track the project. (In 2004, passenger traffic at Dubai International Airport rose 20%, to 22m.) The first phase of the new Jebel Ali Airport City, involving one runway, will cost about $550m.

The project is part of Dubai’s aviation master plan, which aims to make this new airport one of the world’s leading hubs. It coincides with the rapid expansion of the Emirates airline, which was set up by Dubai's government in 1985. Emirates has ordered 45 of the new Airbus A380 superjumbo airliner, the biggest single order. Some say Dubai's plans are over-ambitious, but the emirate has a trump card that few other hubs can match: the government does not tolerate public opposition, so it faces little of the environmental protests that restrict developers in Europe, Asia and North America.

Overheated?

Dubai’s economy grew by a staggering 17% in 2004, according to the city’s Department of Economic Development (DED). Real-estate investment was the big driver of the boom, accounting for some 20% of the economy in 2004. But real-estate consultants have warned that as much as 85% of the demand for the tens of thousands of new homes being built is from speculators. Though Dubai’s population of 1.2m is growing at around 7% per year, it is unclear whether actual demand will support the rash of new projects.

Investment bankers have also voiced concerns over the booming UAE stockmarket. The Shuaa Capital UAE General index climbed 103% in 2004, raising fears of a speculative bubble. Shares in Emaar Properties, one of Dubai's “big three” real-estate developers, rose from just over Dh2 per share in January 2004 to Dh14 in January 2005.

Root them out

Dr Ali Abdullah Al Ka’abi, the new Labour Minister, has pledged a crackdown on social-security abuses, making sure that the annual Dh700m ($190m) welfare budget reaches the neediest. (Only UAE nationals are eligible for welfare support.) He criticised the lack of means-testing for welfare applicants under the current system, noting that some regular claimants also hold big stock portfolios. Labour Ministry staff plan to review all existing welfare cases. Any cost savings will be used to increase welfare payments, which have not kept up with inflation, and to fund training schemes to help unemployed UAE nationals find work.

The business of bling

Society magazine OK! was launched in Dubai in January, to spotlight the rapid growth of celebrity culture here in recent years. What was once a wasteland of kitsch hotel bars and dour corporate functions has become considerably more glamorous. An aspirational glitterati has emerged, fuelling a booming industry in society magazines and newspaper columns. Cynics claim there are more photographers than guests at many of the “swanky” parties these rags cover, and editors are often found scraping the bottom of the barrel for material—one title recently featured the opening of a supermarket. But there’s no doubting the demand for these new magazines, which fly off the newsstands. Advertisers such as Armani and Hugo Boss are throwing money at them, which presumably enticed OK! to join the party. Others are rumoured to be following suit later this year.

Catch if you can

February 2005

Dubai Shopping Festival

January 12th-February 12th 2005

Love it or loathe it, Dubai's Shopping Festival remains a glittering fixture in the emirate's calendar. The month-long retail promotion, which this year celebrates its tenth anniversary, features discounts on everything from designer clothes to dishwashers, with daily raffles offering luxury four-wheel prizes, and a slew of special events. The big draw in 2005 is the new Global Village, a sprawling open-air crafts fair selling “traditional” goods from around the world.

The festival's formula clearly works. In 2004 it attracted 5.4m visitors (mostly from Saudi Arabia, Kuwait and Qatar)—a dream come true for Dubai’s shops and hotels, but a nightmare for residents, who have braced themselves for heavy traffic and congestion.

For details visit the official shopping festival website.

HONG KONG BRIEFING February 2005

News this month

I'm sorry

Tung Chee-hwa, Hong Kong's chief executive, used his annual policy address on January 12th to express remorse. He said his government's “inadequacies have undermined the credibility of our policy making capability and our ability to govern”. After seven years of financial uncertainty and outbreaks of SARS and bird flu, Hong Kong's economy is finally riding high. But instead of enjoying the recovery, Mr Tung has had to respond to both growing public distrust and a sharply worded warning from the Chinese government.

Twice in the past two years, up to 500,000 people have marched against Hong Kong's leaders, protesting anti-sedition laws and calling for universal suffrage. Mr Tung is getting it from both sides: on December 20th, Hu Jintao, China's president, urged Hong Kong's government to “examine its inadequacies, and continue to raise its competence”.

No culture?
Plans for one of the world's most lucrative public-land developments, a cultural centre on Hong Kong's harbour, are mired in controversy. At issue is Norman Foster's $6.8 billion proposal for the West Kowloon Cultural District, a 40-hectare complex comprising at least four theatres, an opera house, a sport stadium and seven museums, some of which will be overseen by the Guggenheim Foundation and France's Pompidou Centre. Hong Kong's government had hoped this complex would combat the city's reputation as a cultural desert.

The government had planned for the project to be given to one developer, which would manage the centre for 30 years. The shortlist of bidders comprises three consortia of Hong Kong's biggest developers. But on December 25th, thousands of people protested against the government's preference for a single developer, accusing lawmakers of colluding with Hong Kong's wealthiest tycoons. On January 6th, every faction of the legislature helped pass a motion calling for the single-developer idea to be scrapped, and for the formation of a statutory body to plan, develop and manage the district. Two days after the motion, smaller developers, including Stanley Ho, Macau's leading casino owner, met to discuss ways of allowing more than one developer to build the district.

Link WRONG?

Hong Kong's Housing Authority had planned to create the world's largest real-estate investment trust, Link REIT, by selling 151 retail properties and 79,000 parking spaces to a holding company. The initial public offering of $3 billion was due to go forward on December 20th, but was delayed when Lo Siu-lan, an elderly resident of public housing and an unlikely David, mounted a legal challenge against the project. She claimed it violated an ordinance that mandates that the Housing Authority provide parking spaces and commercial amenities for public-housing tenants.

On January 14th, Goliath struck back: after an appellate court rejected her challenge, the government refused Ms Lo's application for legal aid to take her case to the Court of Final Appeal. Still, her application triggered a stay of proceedings until February 25th, leaving the fate of Link REIT in limbo. Sources say Ms Lo offered to file an early final appeal only if the Housing Authority bears all legal costs. The authority has not yet accepted her offer, but with 500,000 Hong Kongers already invested in the IPO, markets around the world are hoping for a quick and final legal decision.

Tough times ahead

One of the most closely followed business stories in the city is Hutchison Whampoa's $22 billion bet on 3G mobile-phone services, which enable data downloads and video conferencing. Though many have criticised the venture as a quixotic gamble, Canning Fok, Hutchison's boyish managing director, insists that 3G is primed for explosive growth, having signed up 6.8m users by Christmas—well past his goal. Nonetheless, the conglomerate cut 20% of its Hong Kong telecom workforce (750 jobs) on January 5th, and followed up with a further cut of 400 jobs in Thailand and Israel.

The firm says these cuts, and other business improvements, will yield savings of up to HK$300m ($39m) per year. It also blamed the Hong Kong government for the job losses, claiming it has created too tough a market by flooding it with 3G licenses. The market certainly isn't ideal: in Hong Kong, the six mobile-phone operators have a market penetration of 117%, a figure that must surely give pause to even a gambler like Mr Fok.

Death of an icon

Kam Shui-fai, who founded Hong Kong's renowned Yung Kee restaurant, died on December 27th at the age of 92. Yung Kee was one of Hong Kong's first restaurants to become known internationally, and it draws crowds to this day. Kam became a symbol of rags-to-riches success in Hong Kong.

He started selling food from a dai pai dong, or mobile food-stand, on Kwong Yuen Street in 1936. In 1942, when occupying Japanese forces, worried about hygiene, threatened to close all food stands, Kam upgraded to a restaurant. It was destroyed two years later in a bombing, which killed some staff. Yung Kee has been in its location on Wellington Street, in the Central District, since 1964, and Kam, known as “Roast Goose Fai” after Yung Kee's specialty dish, continued to visit the restaurant every morning until just before his death. He was buried in Macau on January 13th.

Catch if you can

February 2005

Chinese New Year

February 9th-11th, 2005

Like most of the Sinophone world, Hong Kong will celebrate the beginning of the Year of the Rooster in early February. Though the actual first day of the year is February 9th, Hong Kong will celebrate the following night, with a huge fireworks display over the harbour. The fireworks are not only in celebration, but also to scare away lingering demons and to ensure good luck. The display begins at 8pm; expect crowds of up to 500,000.

For the rest of the holiday, enjoy the remarkable spectacle of a tranquil Hong Kong. Chinese New Year is the only time most shops close and the city's famously raucous streets are empty: locals either stay at home with family or leave for the mainland.

MEXICO CITY BRIEFING February 2005

News this month

Still on top

Andrés Manuel López Obrador, Mexico City's Teflon mayor, is riding high. The man who is known as “AMLO” recently won 95% support in a referendum to determine whether he should serve the rest of his term, which ends in 2006. Despite scandals among his closest advisors, the threat of a trial over a city land-deal and constant jibes from Vicente Fox, Mexico's president, Mr López Obrador remains one of Mexico's most popular politicians. The leftish mayor tops the polls of presidential hopefuls for the 2006 election.

Exasperated by the opposition's calls for his resignation, Mr López Obrador organised this referendum to repudiate them, a tactic that proved helpful to him in 2002. A state-wide telephone poll asked respondents to “Say yes or no to López Obrador.” Around 531,000 votes were cast, representing 10% of the state's voting population. At 95%, Mr López Obrador finished a half-point behind his 2002 referendum: not bad for the fifth year of a six-year term.

Year of the Bike?

Presiding over a smog-filled, traffic-ridden city, local officials have long tried to convince residents to swap their cars for bicycles. These optimistic, perhaps quixotic, efforts will soon receive a fresh impetus: Mexico's director-general of Urban Woodland and Environmental Education has declared 2005 the Year of the Bicycle. Among the promised initiatives for intrepid urban cyclists are pit stops along 90 kilometres of dedicated bicycle lanes, offering water, compressed air and toilets. To make transporting cycles easier, special retractable bike holders will be imported from the United States and installed on the backs of city buses.

But don't expect a rush for bicycles. Bernardo Baranda, an official with the Centre for Sustainable Transport, admits that most of the capital's residents don't even know about the cycling lanes, inaugurated last year. Even if they did, would they use them? Although cycling offers health and environmental benefits, this is one instance where the risks may outweigh the rewards. In a city where the number of cars rises by 300,000 per year, alternative transport is clearly necessary; but with all those cars still on the roads, cyclists risk life, limb and lung.

Downtown bargains

This is a rare city where residents can lower their rents by moving to the centre of town. To stimulate growth in the downtrodden historic centre of Mexico City, Mr López Obrador is offering up to 100% discounts on a range of taxes and permits to people prepared to gamble on urban renewal. Permits for water installation and drainage will be free, as will building licenses and permits for commercial use of properties. Anyone who owns a property listed as an historic monument will not pay taxes on restoration work.

The offer's generosity is a measure of the mayor's desire to encourage businesses, shops and housing to move downtown. For decades, especially since the 1985 earthquake, the centre has been one of the city's scruffiest and most dangerous areas. In other cities, a centre's beautiful but crumbling old buildings would have been snapped up long ago. Here however, investors are loath to risk their money on structures that are slowly sinking, leaning at crazy angles as they subside into a former lake bed. It could take more than a free construction permit to tempt buyers.

Rubbish treasures

From tricycles to pre-Hispanic artefacts, Mexico City's main boating lake is coughing up its secrets. As part of the renovation of El Bosque de Chapultepec, the city's main park, the lake is being dredged for the first time in over 30 years. A sobering amount of rubbish is surfacing: two full truckloads came out in the first week, with clothes, lost oars, acres of plastic waste and soda bottles dating from the 1960s.

In fact, some of the trash is so old that the National Institute of Anthropology and History has been called in to sift through the junk. Because of the potential archaeological treasures—the area lies near the heart of the former Aztec capital—much of the dredging has been carried out with pick and shovel. Some pre-Columbian clay pots and bones have already emerged. In the meantime, the first section of the park is closed to visitors. The spruce-up's cost has already surpassed $3.5m, and is projected to rise to nearly $7m.

Catch if you can

February 2005

Luís Barragán House

Continuing

In case you needed more reasons to visit an excellent example of Luís Barragán's architecture, this house is now the first 20th-century building in Latin America to have been declared a UNESCO World Heritage site. Luís Barragán (1902-1988) is the undisputed genius of modern Mexican architecture. His style is bright and vernacular: the big, colourfully painted masses of his buildings are often linked by courtyards washed in sheets of water and carefully angled sunlight. The boldness of his style inspired a host of imitators, making him the dominant force in Mexican post-war buildings, plazas and gardens.

The Mexico City house and garden—finished in 1948—in which he lived and worked is an outstanding example of his style. UNESCO has called it “a masterpiece of the new developments in the Modern Movement”. There are now plans to restore and protect the building.

Casa Museo Luís Barragán, General Francisco Ramírez 14, Amplicación Daniel Garza. Open: Mon-Fri 10am–2pm and 4pm-6pm, Sat 10am-1pm. Tel: +52 (55) 5515-4908 or 5272-4945.

LONDON BRIEFING February 2005

News this month

Mourning

The London Stock Exchange ceased trading, double-decker buses pulled off the road and the London Eye slowed to a standstill on January 5th as the city observed three minutes of silence for the victims of the Asian tsunami. Fifty-three Britons are known to have died in the disaster and a further 413 were missing as of January 18th. Many South-East Asians living in the capital have also lost friends and relatives: one Sri Lankan businessman told reporters how his wife and almost 100 family members were drowned after the tidal wave swamped his village.

Assistance in identifying the victims' bodies has been provided by forensic experts from the Metropolitan Police. A temporary morgue was set up in Chelsea to receive bodies flown home. The devastation caused by the Asian tsunami has prompted some observers to ask whether London is adequately protected against flooding. Though the Thames Barrier provides some defence, the Environment Agency is considering building a ten-mile-long flood barrier from Southend in Essex to Sheerness in Kent to guard against rising sea-levels.

Miserable not merry

The festive season proved a miserable period for many of London's bricks-and-mortar retailers. Figures published by the London Retail Consortium (LRC) on January 17th showed that December sales in the city centre were 2.5% lower than in 2003. This was despite extensive discounting and other promotional schemes in the run-up to Christmas. Dubbing it “one of the worst Christmas periods ever”, David Southwell, the LRC's director, pointed the finger at last year's interest-rate rises, fears about the housing market and increases in council tax. He also highlighted a decline in foreign visitors caused by the dollar's downward spiral and the growing popularity of out-of-town shopping venues.

Free rags

London's commuters may soon have a wider choice of free newspapers after the mayor, Ken Livingstone, said he'd tear up an exclusive deal with the Daily Mail and General Trust (DMGT). Under current arrangements, DMGT pays £1m a year to distribute its free newspaper, called Metro, at stations across the capital. But the monopoly has been criticised by rivals and is being investigated by the Office of Fair Trading. Mr Livingstone's announcement appears to have pre-empted a decision by the government body.

The news will please Richard Desmond, owner of Express Newspapers, who wants to launch a free afternoon paper to compete with the Evening Standard (also owned by DMGT), which costs 40p. A new title could be on the stands within eight to ten weeks. The London Underground could gain as much as £6m by allowing more free newspapers to be distributed from its stations—though don't expect fare reductions anytime soon.

Battle of the bourses

Will the venerable London Stock Exchange (LSE) capitulate to a continental rival? In December, Deutsche Börse, owner of the Frankfurt Stock Exchange, approached the LSE with a £1.35 billion ($2.6 billion) takeover bid. The LSE's board of directors rejected the offer, saying it was too low, but the two sides have continued talking. Big questions about how a merged exchange would be regulated and whether efficiency gains will be passed on to investors must be resolved first.

Deutsche Börse's supervisory board approved the bid on January 17th. But some of its investors are opposing the proposed takeover, arguing that the bourse's spare cash should be used to buy back its own shares. (Deutsche Börse does not require their consent.) A second suitor has meanwhile emerged in the form of Euronext, a Paris-based exchange group that already controls Liffe, London's derivatives exchange. Online bookies have it as the slight favourite; overall odds of the LSE remaining independent have widened to eight to one.

Hadid it

New cultural buildings are a rarity in central London—the last big one to be commissioned was the British Library, in 1978. Now, however, the South Bank is set to gain a striking new landmark in the form of the Architecture Foundation's exhibition centre. At a ceremony on January 12th, Rowan Moore, director of the non-profit organisation, announced that the £2.25m structure would be designed by Zaha Hadid, a London-based architect and winner of the prestigious Pritzker prize. Her bold, geometric design was praised for combining “an emphatic presence and form with visual permeability and public accessibility”. It was chosen from 208 entries.

The building will be Ms Hadid's first permanent commission in London. In recent years she has shed her tag as the world's best-known “paper architect” (that is, good at dreaming up unbuilt projects) by constructing striking creations such as Cincinnati's Rosenthal Centre for Contemporary Art and the Bergisel ski jump in Innsbruck. Funding for the exhibition centre will be provided by Land Securities, a property developer that's reshaping the surrounding area.

Wait and see

Pedestrians and vehicles will mingle in a radical redesign of Kensington's Exhibition Road. Under the revolutionary scheme, spearheaded by the borough council, all barriers and signals separating the roadway from the pavement (including the kerb) will be removed to create a “shared space” with cars. Those driving will be asked to observe a maximum speed limit of 20mph.

The concept behind the redesign is that drivers and pedestrians will be more cautious because they'll no longer assume they have right-of-way. Despite predictions of chaos, similar schemes in the Netherlands have made car journeys quicker and cut traffic-related accidents. Britain's Royal Automobile Club says it will be watching the trial closely. If successful, “naked roads” could be introduced elsewhere in Britain. Kensington & Chelsea council has already earmarked Sloane Square as the next venue for the concept.

Catch if you can

February 2005

Turks: A Journey of a Thousand Years, 600-1600

Until April 12th 2005

It hardly seems like coincidence that this exhibition coincides with Turkey's trajectory towards European Union membership. But its name may be misleading: the “Turks” here are not merely from what we know of as Turkey, but from the legacy of the long migration of the Turkic peoples from Central Asia to Anatolia and the Balkans. Expect plenty of artefacts from the Turks' conversion to Islam and their establishment of the mighty Ottoman Empire. As such, is as much about the Silk Road as about Istanbul, from where many of the pieces are on loan (courtesy of the Topkapi palace).

It is a fantastic display, albeit overwhelming. Chinese porcelain sits alongside Venetian glass, stunning textiles, intricate armaments and Ottoman religious ornaments. Most interesting are the 14th-century drawings of Muhammad Siyah Qalam (“Muhammad of the Black Pen”), depicting the mysterious world of the nomads who controlled trade along the Silk Road.

Royal Academy of Arts, Burlington House, Piccadilly, London W1J 0BD. Tel: +44 (0)870 848 8484. Open: Sun-Thu 10am-6pm, Fri-Sat 10am-10pm. See the sites for the Royal Academy and the exhibition.

ATLANTA BRIEFING February 2005

News this month

Aggressive

“Georgians are not only our constituents, they are our customers,” said Sonny Perdue, Georgia’s Republican governor, to the state legislature in his 2005 state of the state speech on January 12th. Mr Perdue decried “busybody” legislation, saying he wanted a government “smart enough to get out of the way”. That puts him at odds with some of the state's Republicans, who dominate the legislature. Mr Perdue also publicly distanced himself from a bill that would make it harder to obtain no-fault divorces.

Mr Perdue’s legislative agenda includes a budget with modest rewards for high-achieving teachers and $5m for the historically underfunded Division of Family and Children Services. He has also introduced a bill requiring lawmakers to wait a year after leaving office before they can lobby the state. Mr Perdue had little to do with one of the more controversial proposals confronting the legislature in 2005: the repeal of state and local laws prohibiting bias against gay couples.

Slow steps forward

A judge in Cobb County, north-west of Atlanta, has struck down the use of controversial stickers in science textbooks which say “Evolution is a theory”. On January 13th he ruled that the stickers constituted an endorsement of religious beliefs, rendering them unconstitutional. The local school board is considering an appeal.

The stickers were placed on the textbooks in 2002, after a self-described creationist parent organised a petition with more than 2,000 signatures. Other parents immediately sued. The county has already adopted new state science standards—a year early—that require teaching evolution in high school.

Chief entanglement officer

In early January a woman filed a rape claim against Vernon Jones, chief executive of DeKalb County, east of Atlanta. The 29-year-old woman claimed that Mr Jones raped her on December 28th in his home. The DeKalb County prosecutor’s office, in an attempt to avoid a conflict of interest—Mr Jones’s job includes hiring and firing DeKalb County police—has turned the case over to the Georgia Bureau of Investigation. No charges have been filed yet. Mr Jones has said that he has faced false allegations before and will “prevail again”.

He has had a controversial career, and some have criticised his high-handed and grandiose style. In 2003, Mr Jones was found to have charged the county $630,000 for round-the-clock bodyguards. On January 7th, he agreed to pay a fine for accepting more than the legal amount of contributions for his 2004 re-election campaign.

Man of God

The archdiocese of Atlanta has a new archbishop: Wilton Gregory, a black Chicagoan who converted to Catholicism at the age of 11. He was installed on January 17th, Martin Luther King, Jr Day. Archbishop Gregory has a reputation for being calm and charming: one critic described his style as “Reagan-like”. He also has a long history of dealing with the Catholic church’s sex-abuse scandal, having expelled several priests from his parish in Illinois in the 1990s, and having called for reform during the Vatican’s conference of cardinals in April 2002. The new archbishop’s biggest challenge in Atlanta may be reaching out to the city’s rapidly changing Catholic population. The city’s Hispanic Catholics have tripled in the past decade, and now nearly half of 108 local parishes celebrate Mass in Spanish.

Trying to fly right

Delta Air Lines, a troubled carrier based in Atlanta, weathered problems during the holidays. Amid some of the year's busiest travel days, a computer glitch forced Comair, a regional subsidiary, to cancel more than 1,000 flights. On January 17th the president of Comair resigned, to be replaced by a Delta executive. Comair is based in Cincinnati, Delta’s second-largest hub.
Delta is acting aggressively to right its fortunes. On January 5th it introduced a new fare structure. Fares for flights within the continental United States are now capped at $599 one-way, and the Saturday stay-over rule has been eliminated. Delta saw traffic rise by 30% out of Cincinnati after it experimented with the new fare scheme in autumn 2004. Other carriers have followed suit, perhaps spurring the shake-out that many have predicted for the industry.

Catch if you can

February 2005

ATLart [05]

January 26th-February 6th 2005

The awkwardly named ATLart [05], now in its second year, is a collaborative effort by the members of the Atlanta Gallery Association (AGA) and various local museums. This year sees the creation of a special Art House, a Buckhead mansion converted into an exhibition space with works on loan from galleries throughout the city. Patron’s tickets are available for the preview party at the High Museum of Art on February 3rd, and an auction by Art Papers, a contemporary art magazine, on February 5th. The best-attended event, however, will be on January 28th, when AGA members stay open late and offer cash bars and hors d’oeuvres to Atlantans on the town. Keep an eye out for an Atlanta Celebrates Photography lecture on the extensive collection of Elton John, who keeps a home in Atlanta.

Various galleries and locations. Some events are free, but some lectures require tickets. See the show's website.

BERLIN BRIEFING February 2005

News this month

Remembering them

Berliners are mourning local victims of December's Asian tsunami. At last count, over 600 Germans were missing, and 60 people from Berlin and Brandenburg were either missing or confirmed dead. For weeks, the sunburned and smiling faces of these lost people have led the local news.

Not all stories were tragic. Heike Schultz-Fademrecht and her young sons, Simon and Nelson, on holiday in Sri Lanka, survived thanks to Simon's cleverness. After studying tsunamis at school, he recognised the ebbing waters as a sign of impending disaster, and the family raced for high ground. They returned to Berlin determined to help those less fortunate: by early January, they had raised €56,800 ($74,300) in donations. Overall, Germans have proved very generous. Local radio stations report that every third Berliner has made some sort of contribution.

Piled high

How many monuments does Berlin need? The 1990s saw the city looking ahead, with expansive building projects befitting its new capital-city status. Lately the focus has been on the painful past, commemorating the victims of totalitarianism. So far the only official memorial project under way is the long-overdue “Monument to the Murdered Jews of Europe”, on a site the size of three football fields next to the Brandenburg Gate. It is due to be unveiled on May 10th.

Now the city is looking to commemorate those who died attempting to cross the Berlin Wall. A makeshift memorial at the Checkpoint Charlie border-crossing was erected privately in 2004, and almost 200 national parliamentarians have backed a plan for an official monument, also at the Brandenburg Gate. A monument to over 500,000 Gypsies murdered by the Nazis will probably be erected this year near the Reichstag, and Nazism's homosexual victims may soon have a site across the street from the Jewish memorial. Representatives of other victims of Nazism—notably army deserters and Jehovah’s Witnesses—are now calling for their due.

Hot to trot

Since mid-December, Berliners seeking a midwinter tropical holiday need not undertake an arduous air journey. Paradise now lies 60km from the city: Tropical Island is a Disneyland-style melange of white sand beaches, rainforest and lagoons, where the temperature is a constant 25-30º Celsius. It sits in a huge hangar once occupied by an airship business. Romantics can hold hands and watch as the sun rises and sets, projected onto a 150-metre-high screen. There is a nightclub, and visitors can even camp overnight.

Tropical Island doesn’t pretend to be a specific tropical paradise. Instead it borrows elements from Asia, Africa and South America to offer an enjoyable, if somewhat vapid, experience. The €70m undertaking is the brainchild of a consortium led by Colin Au, a Malaysian businessman. Investors hope to draw 2.4m visitors a year, despite scant initial crowds. Still, it's early days, and the project has added a glow to the depressed Brandenburg region. More than 500 people, many of whom were unemployed, now have jobs—and who could criticise the prospect of year-round tans?

Not extinct yet

The much-loved dinosaurs at Berlin's Museum of Natural History are going into hiding for two years, during the building's €17.7m reconstruction. Starting on February 28th, the dinosaurs, including the spectacular brachiosaurus in the museum's entryway, will be packed away, bone by bone.

The skeletons, some of which are close to 150m years old, have been in German hands since the early 20th century, when Werner Janensch, a local palaeontologist, brought them from Africa. Although shifting the dinosaurs is a logistical nightmare, the curators plan to make good use of the opportunity. When the skeletons are returned to their proper place in 2007, specialists will adjust their positioning to take into account new discoveries (the skeletons have not been altered since they were positioned in the 1930s). The brachiosaurus, for one, will stand a full metre taller than its current 12-metre height. The bones will also get a thorough cleaning and repair.

Facing east

A cold war of sorts has broken out at Berlin's prestigious Deutsches Theater. Christoph Hein, a writer who was chosen in 2004 to become director later this year, has bowed out, citing a “hostile climate” at the theatre. The shortlist of replacements has not yet been announced, but speculation surrounds several people who made their name in communist East Germany. The choice will be made by Thomas Flierl, Berlin's culture minister (himself from the former East Germany), who has made clear that he wants an easterner for the job. Bernd Wilms, the current director, hails from the former West; Mr Hein is from the former East.

Mr Flierl says he wants to “renew the spirit of the house”—in communist days, the theatre had an avant-garde reputation. Mr Wilms has pushed the theatre in a more conservative direction. But many are outraged by Mr Flierl's clear preference for fellow former countrymen. Late last year, he appointed easterners to two other top cultural jobs in Berlin: general director of opera (overseeing all three opera houses in Berlin) and director of the Maxim-Gorki Theater.

Catch if you can

February 2005

Time of the Dawning: Japanese Archaeology

Until January 31st 2005

This comprehensive exhibition about Japan’s pre- and early history is a must for anyone interested in archaeology. The display covers 40,000 years, from the earliest settlements on the Japanese islands through the introduction of Buddhism in the 6th century AD, and then the Asuka and Nara periods in the 7th and 8th centuries. Some 1,500 objects are on display, including tools, fine ceramics, undecorated pottery, weapons and armour, jewellery, clothing, simple household goods and precious burial objects.

Charts and audio guides are available in German and English.

Martin-Gropius-Bau, Niederkirchnerstrasse 7, 10963 Berlin-Mitte. Tel: +49 (0)30 254 860.

See the museum's exhibition information.

Risky recipe: big snow and more thrill seekers

from the January 20, 2005 edition - http://www.csmonitor.com/2005/0120/p02s02-ussc.html

By David Frey Contributor to The Christian Science Monitor

ASPEN, COLO. - A foot of snow had fallen overnight on Aspen Mountain, and Billy Zuehlke heeded the call of fresh powder.

With three friends two weeks ago, he cruised to a steep pitch of untracked snow, out of bounds but legal, tucked alongside the mountain's double-black-diamond slopes. An Aspen ski instructor, Mr. Zuehlke knew fresh snow on steep pitches could mean avalanches. But this was familiar territory and he hoped early-season skiers had compacted the bottom layer. A quick duck into the glade and they'd be back in bounds.

Mr. Zuehlke traversed ahead alone when he spotted snow cracking below, then above him. In an instant, the ground gave way and he was swept 50 yards downhill and buried in heavy snow. For a moment, he believed he would suffocate. "Initially what went through my head was, 'Oh, my friends are going to kill me,' " he said. "The next thought was, 'Does this mean I can't ski in Jackson Hole tomorrow?' "

Zuehlke freed an arm and managed to dig himself out, escaping with just a strained tendon in his leg. "Things could have been a lot worse," he says.

Each year, more and more skiers and snowboarders head into the backcountry to quench a growing thirst for an adventurer's rush - deep powder, big solitude, and high adrenaline - that groomed ski areas can't deliver. The abundance of off-piste gear and even the proliferation of communication devices has encouraged the surge in confidence convincing thrill seekers to trudge off the trail. But sometimes that courage eschews precaution, and skiers can be careless about learning practical safety techniques to avert, or survive, avalanches.

Indeed, avalanches have killed 16 people in the US this season. Last Sunday, searchers found the body of a snowboarder who triggered an avalanche outside The Canyons ski resort near Park City, Utah. The same day, a pair of snowboarders were killed in an avalanche in the mountains of northern Idaho.

Colorado has logged 896 avalanches this month, from slides triggered intentionally by ski patrollers firing Howitzers to natural slides on remote slopes. For every slide reported, 10 may go unseen. That prompted rare warnings last week, urging thrill seekers to stick to the resorts.
One reason for the danger is the battery of storms that hammered the West through early January, bringing avalanche risk so high some called it "apocalyptic."

Another factor is the growing lure of the backcountry. "I think extreme sports and the attitude of adventure and daring and risk-taking certainly motivate people," says Dale Atkins, an avalanche forecaster for the Colorado Avalanche Information Center in Boulder. "Add to that the gear. It's easier to use and that makes it easier for people to get out there."

Once the province of old-school experts, free-heeled ski gear has become heftier, making it easier for novices to master the tricky telemark turn. Alpine touring gear, meanwhile, lets skiers free their heels for walking up slopes and lock them down for rides through virgin powder.
Figures are hard to pin down, but most agree that the numbers of backcountry skiers and boarders are growing while ski areas struggle to increase visitors. Industry figures estimate that 3 to 6 percent of the nation's 11 million skiers venture out of bounds - some 300,000 to 500,000. Telemark gear sales leaped 75 percent from 2003 to 2004.

"There's just a natural human desire to test oneself and go to the next level, and backcountry offers the adventure you can't get anywhere else," says Craig Dostie, publisher and editor of Couloir magazine, devoted to off-piste skiing.

Recent events, however, have sobered the derring-do set even though many say the rush of adrenaline and the sights of untouched terrain are hard to resist. "[Backcountry skiing] makes you feel in touch with nature," says Zuehlke. "Whatever else is going on in town below you is a distant memory."

And Atkins hopes skiers, no matter how skilled or knowledgeable, use good sense. "When big avalanches are triggered naturally ... there are few places to hide."

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All in a day's work: eat Chinese takeout, save planet Earth

from the January 20, 2005 edition - http://www.csmonitor.com/2005/0120/p01s03-ussc.html

By Patrik Jonsson Correspondent of The Christian Science Monitor

ATLANTA - A.C. Charania has a vision to protect your house from sudden attack. Not from rogue missiles from North Korea, but from wayward rocks hurtling toward Earth.

His plan: In case of an incoming asteroid, send an army of nuclear-powered robots called MADMEN to grab hold of the errant rock, drill into it, and use rail-guns with a nuclear charge to shoot buckets of debris into space and sway its trajectory. That way Earth could avoid the type of celestial collision that may have made dinosaurs extinct.

Seriously.

Call it Hollywood meets the Dixie rocketeers. Here in an Atlanta office building, a group of space futurists is devising ways to do everything from bounce objects off comets to send tourists to Mars. They're part of a new breed of space entrepreneurs fed by both NASA and a sense of Star Trek possibility.

Here at SpaceWorks Engineering, Inc., the small outfit where Charania works, artists' penciled visions leap out in chrome on black, and robots swarm toward a rocky asteroid. More science than fiction, the MADMEN (short for Modular Asteroid Deflection Mission Ejector Nodes) evolved from the idea of using swarms of diving robots to explore the ocean moon Europa.
Certainly there is a need for something to protect Earth. Some 2,700 "near-earth objects" careened by the planet in the last decade alone.

"We're asking people to dig a little deeper into their creative psyches and use their imagination to come up with new ideas," says Robert Cassanova, director of the NASA Institute for Advanced Concepts, also in Atlanta. "We're not looking for technical details; we're looking for the grand ideas."

Charania and his comerades are part of a growing network of artistic engineers keen to "leapfrog" technologies that will bring space closer, faster. Their energy is due in part to private innovations like Mr. Rutan's X Prize-winning spaceship and a seven-year-old NASA seed effort to engage the minds of young Arthur C. Clarkes, daydreaming in the suburbs and sketching rockets in class.

Already, NASA is funding research into everything from growing vegetables on Mars to a "space elevator": a 62,000-mile flexible tube, held in place by centrifugal force, that would offer cheap and rocketless rides from the equator to the fringe of space. As NASA's focus shifts away from the space shuttle and space station over the next decade, many expect this kind of work to garner more attention, and plenty of funds.

Much of the conceptual work is taking place deep within aerospace firms and on college campuses from San Francisco to Raleigh, N.C. But SpaceWorks is a new model, trading bureaucracy for entrepreneurship in an enterprise where scientists do everything from propulsion calculations to making copies at Kinko's, and find time to attend Star Trek conventions, too.

SpaceWorks' glassy quarters off Atlanta's Perimeter Mall, alongside an H&R Block office, is decorated with the latest in stargazer chic: German moon maps from the 1800s, a top-of-the-line light saber, shiny Star Trek lunch boxes. The seven engineers stay up late over Chinese takeout, as keen to talk about eBay finds of space paraphernalia as the dynamics of inflatable modular habitats. "The mojo doesn't really start flowing until around 7 p.m.," says John Bradford, the wonky president of SpaceWorks.

To date, they've worked on everything from a military space fighter to a Martian telecom grid that would bounce off the tails of comets - imagining the practical use of space for everything from tourism to burials. While the work is mostly conceptual, it hews to the physical laws of the universe.

Less scientific, though just as crucial, is a reverence for imagination. The MADMEN scheme is called "The League of Extraordinary Machines"; the Mars telecom scenario is called, with a tip of the hat to Star Trek, "Networks on the Edge of Forever."

"Imagination is a driving force in this place, and everyone is expected to contribute," says Charania, whose black cotton suit is cut with the drastic simplicity of a Star Trek villain.
But while their heads are clearly in space at this firm that's garnered contracts with half a dozen NASA centers, and has hopes of doing some Hollywood consulting on the side, there is some terrestrial urgency to their quest. Charania is already putting the final details on his plans for the country's first Center for Planetary Defense, which he expects to open in Atlanta by the end of the year.

Such dangers have long been part of the popular imagination, of course, with movies like "Deep Impact" and "Armageddon." But not all of it is fantasy - which may account, in part, for the dismal dreams' appeal.

Out of six near-extinction events during the era of life on Earth, at least two were related to asteroids. A crater off Mexico is believed to be the site of an asteroid hit that snuffed out the dinosaurs, and in 1908, the explosion of a space rock above remote, sparsely populated Tunguska, in Siberia, wiped out thousands of trees and gave off a salmon-pink glow that could be seen from London. Last summer, minor planet 2004 CZ1 squeaked past Earth by an interstellar whisker of 3.8 million miles. And on Christmas Day, earthly and intergalactic matters seemed to merge as a tsunami formed just a day after a space rock's planetary close call.

To the SpaceWorks crew, it was a prescient reminder of what could happen if a an asteroid plummets into the sea.

Still, Mr. Bradford is cautious, wary of the impression that SpaceWorks is a cheap hustler of cosmic salves. "We don't try to oversell our ideas," he says. "If anything, we try to temper expectations of what is possible."

For all its promise, the MADMEN idea may not be a good first defense; the comet-tail telecom array might work better as an emergency backup for satellites.

But all those cosmic dreams - and all that caution - doesn't hamper the group's engagement with the "real" world. Unlike the super-engineers who launched Apollo, many of today's up-and-coming futurists feed off popular culture, even when it clashes with the realities of deep space.
"My wife won't even go see science-fiction movies with me anymore," complains Brad St. Germain, the director of advanced concepts. "The whole time I sit there, pointing at the screen, going, 'That's not how it works!' "

Several of the crew attend the annual DragonCon fantasy conference here in Atlanta, where they take questions about interstellar travel from would-be Klingons. And they're not the only real engineers scoping out the well-costumed scene. When they run into NASA workers in the hall, the cliques try to avoid eye contact before exchanging embarrassed hellos.

Their passion for space, they admit, is partly rooted in the toys that fascinated them as children. Charania grew up on Ray Bradbury and Japanese anime, Bradford found his engineering prowess in Lego kits, and St. Germain built model rockets, even winning a first-place ribbon in seventh grade. His most innovative junior high concept? A 2-liter Coke bottle with a lizard inside, his own makeshift biosphere.

Alighting on the memory, he recalls a measured triumph: "The parachute didn't deploy," he says, "but the lizard lived!"

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Hard job of blowing the whistle gets harder

from the January 20, 2005 edition - http://www.csmonitor.com/2005/0120/p13s02-sten.html

By Mark Clayton Staff writer of The Christian Science Monitor

It was never easy to be a whistle-blower - and some say it may be getting tougher. Just ask George Zeliger. Nearly four years ago the quality-control expert warned his employer, the Massachusetts Department of Environmental Protection, that the state's new auto emissions test was grossly inaccurate.

He was ignored. When he objected that the test was harming air quality and public health, he was cut from the program. After he went public, sharing key documents with the state inspector general and news media, the atmosphere at his workplace changed. His schedule was micromanaged; colleagues began sending him sarcastic e-mails and job ads, he recalls.

Finally, this past September, the Russian-trained mathematician and statistics whiz was ordered to spend much of his day photocopying, stapling reports, and stuffing envelopes.
"My life here is hardly bearable," says Dr. Zeliger, who came to the US in 1990. "How would you like it if they sent you to the mail room to do copying and stapling? My experience with the Soviet bureaucracy tells me it is a baby compared to this one."

Lionized by Hollywood and protected by federal law, the lone employee who stands up to a large bureaucracy has become a well-established part of American culture. In 2002, Time magazine put three whistle-blowers on its cover, lauding them as "persons of the year."

But the hard truth is that blowing the whistle is a long, tough slog in which people sacrifice careers, friends, and job security to do what they believe is right. And in a small corner of that world - environmental whistle-blowing - such sacrifices appear particularly extreme. Ironically, where complaint dismissals and court rulings have eroded whistle- blower protection, their numbers have increased. Yet where legal protections have grown, the number of whistle-blowers has stayed flat or even fallen.

John Fitzgerald, an analyst with the US Agency for International Development (USAID), never expected to find skulduggery. His job was to evaluate proposed international aid projects to ensure that they met environmental requirements. Under a statute called the "Pelosi amendment," US delegations to the World Bank and regional development banks cannot support any aid project without an environmental review, if that project will have significant environmental effects.

But what Mr. Fitzgerald found shocked him. In some years, nearly half of funds loaned by multilateral development banks, which use US funds, are for loans that receive no US environmental review. Of those that are reviewed, many are incomplete or do not meet legal standards.

Fitzgerald drew attention to the Chad-Cameroon oil pipeline - one of the largest such projects in the region - which lacked detailed plans for dealing with oil spills and invasive species from tanker ballast. He reported major environmental problems with a dam project in Uganda and a nuclear reactor project in the Ukraine. For this, his position was eliminated in 2002, he says.

So he filed a whistle-blower complaint, charging that US Treasury officials had pressured USAID to approve energy projects in South America, Eastern Europe, and Africa without the requisite reviews.

Jobless, Fitzgerald worked whenever he could find work and helped his lawyers prepare his case. Eventually, he opened his own law practice.

Last September, more than two years after his original complaint, the federal civil-service court, the Merit Systems Protection Board, ruled that he had been wrongfully terminated. Rather than go to trial, the government reached a settlement, which Fitzgerald and environmental groups consider a major victory.

But it has a Pyrrhic quality, too.

"It was longer and more difficult than I thought it would be - and it hurts when you can't contribute much to your son's college tuition," he says. "You question whether it's worth it all the time. But you just say, 'I've got to do it because I've got to do the right thing.' "

Fitzgerald is one of the fortunate ones. Despite the passage of the Whistle-blower Protection Act for federal employees in 1989, those who have filed complaints under the act face a backlog of unsettled cases and a minuscule success rate. Only 1 percent of such cases since 2001 was referred to agency heads for investigation. Of the last 95 such cases that reached the federal circuit court of appeals, only one whistle-blower won.

"When people come to us, we have to be candid," says Greg Watchman, executive director of the Government Accountability Project, a Washington advocacy group that counsels would-be whistle-blowers in the federal government. "Under current laws protecting federal whistle-blowers, they don't stand a chance."

Yet they keep on trying - and not just on environmental issues. During the first four years of the Bush administration, the backlog at the Office of Special Counsel, set up by Congress to handle whistle-blower disclosures by federal workers, saw its backlog grow from 287 to 690. In addition, the OSC reports 572 new disclosures last year, the highest in four years.

The number of would-be environmental whistle-blowers contacting the Public Employees for Environmental Responsibility has also grown. PEER, which helps environmental whistle-blowers at all levels of government, has seen a two-thirds increase in the past four years.
One key factor in the boom is Bush administration environmental policies that have driven not only lower-level scientists but also more senior government managers to step forward in protest, says Jeff Ruch, executive director of PEER.

The graying of the civil service also may cause more people to blow the whistle and then retire, other experts say. Media attention may also play a role, they add.

Under growing pressure following a scathing General Accounting Office report last year, the OSC this month announced that its backlog had been largely eliminated with just 100 whistle-blower complaints now pending.

"We set up a special projects unit, a team of attorneys devoted to eliminating the backlog," says Cathy Deeds, an OSC spokesperson. "We put them in a kind of war room for a couple of weeks to work through it. We wanted to get through it. So we did."

Whistle-blower defense groups criticized OSC's elimination of so many cases so quickly. But Special Counsel Scott Bloch defended it, saying in a statement earlier this month: "The mission and goals of OSC remain the same - to secure justice for all Federal employees who come to this Office expecting results. We will do so in a more timely fashion."

While whistle-blower protections for federal employees have proven weak, they've improved somewhat for those in the private sector. The newly passed corporate-accountability law - known as Sarbanes-Oxley - has stronger whistle-blower provisions. But it was the new law's requirement for employees to come forward that prompted Bill Wilson, an air quality engineer in Texas for AEP, the nation's largest power company, to speak out.

For months he argued with managers that the company would be required under Sarbanes to "self-report" excess emissions of carbon monoxide and particulate matter at one plant and the illicit burning of chemical waste at another of the seven plants he oversaw.

"They ordered me to prepare a false certificate [for pollution emissions] and I refused," Mr. Wilson says in a telephone interview. "I had the forms up on my machine ready to fill them in. The boss came in and said this is the way we're going to fill them in. I said, 'No,' and I left."

After that, Wilson took his box of e-mails and other documents, which he says shows management knew of ongoing massive violations of the Clean Air Act, to state and federal environmental regulators. Although the US Environmental Protection Agency has yet to act, the Texas Commission on Environmental Quality last summer issued notices of enforcement for the alleged violations.

AEP has fought the state's claims. It also steadfastly maintains the company has done nothing wrong and denies Wilson's allegations. Wilson was fired for other reasons, not his pollution allegations, the company said in a statement last year.

"We take our environmental compliance very seriously," Michael Morris, AEP chairman, said at the time. "We conducted an internal investigation, reviewed the facts related to issues raised by Mr. Wilson, and determined that the appropriate corrective action had been taken or that no violations had taken place."

Wilson, meanwhile, is looking for a job. "But I'm afraid that after going public, there are not too many companies that would want to hire me," he says. "This carried a higher price than I thought. I didn't think AEP would fight this to this degree. The issues I've raised are documented. I don't know how you can argue against a document."

Under the stronger protections of Sarbanes-Oxley - a whistle-blower like Wilson, for example, can move directly to a federal jury trial if the complaint is not acted on within 180 days - it's not yet clear whether more corporate employees are stepping forward.

The number of whistle-blower complaints filed with the Occupational Safety and Health Administration has not risen dramatically since 2002, when Sarbanes-Oxley was passed. OSHA, which administers whistle-blower provisions under Sarbanes-Oxley and numerous other federal statutes, saw its total cases peak at 2,060 in fiscal 2003. But that total declined to 1,922 last fiscal year - lower than the annual totals in two years of the Clinton administration. Its environmental caseload has actually fallen 14 percent during the first four years of the Bush administration compared with the last four years under Clinton.

Because of the small numbers involved in the environmental arena - the annual peak was 85 cases in fiscal 2000 - such comparisons are not statistically significant, an OSHA official says. Still, some see a problem.

The decline "could reflect a skepticism on the part of workers that the current administration will give them a fair hearing," Mr. Watchman says.

Back at the Massachusetts DEP, the agency is still reviewing Zeliger's complaint. "We have fixed the problems found with the inspections and maintenance program, and the EPA regional office has approved that particular fix," says Edmund Coletta, a DEP spokesman.

"I'm just hanging in there," Zeliger says. Since his formal complaint, he's been taken off stapling and envelope addressing duty. "There's still hope," he adds.

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INAUGURAL ADDRESS BY PRESIDENT GEORGE W. BUSH

From the Office of the White House Press Secretary, remarks as prepared for delivery.

Vice President Cheney, Mr. Chief Justice, President Carter, President Bush, President Clinton, reverend clergy, distinguished guests, fellow citizens:

On this day, prescribed by law and marked by ceremony, we celebrate the durable wisdom of our Constitution, and recall the deep commitments that unite our country. I am grateful for the honor of this hour, mindful of the consequential times in which we live, and determined to fulfill the oath that I have sworn and you have witnessed.

At this second gathering, our duties are defined not by the words I use, but by the history we have seen together. For a half century, America defended our own freedom by standing watch on distant borders. After the shipwreck of communism came years of relative quiet, years of repose, years of sabbatical - and then there came a day of fire.

We have seen our vulnerability - and we have seen its deepest source. For as long as whole regions of the world simmer in resentment and tyranny - prone to ideologies that feed hatred and excuse murder - violence will gather, and multiply in destructive power, and cross the most defended borders, and raise a mortal threat. There is only one force of history that can break the reign of hatred and resentment, and expose the pretensions of tyrants, and reward the hopes of the decent and tolerant, and that is the force of human freedom.

We are led, by events and common sense, to one conclusion: The survival of liberty in our land increasingly depends on the success of liberty in other lands. The best hope for peace in our world is the expansion of freedom in all the world.

America’s vital interests and our deepest beliefs are now one. From the day of our Founding, we have proclaimed that every man and woman on this earth has rights, and dignity, and matchless value, because they bear the image of the Maker of Heaven and earth. Across the generations we have proclaimed the imperative of self-government, because no one is fit to be a master, and no one deserves to be a slave. Advancing these ideals is the mission that created our Nation. It is the honorable achievement of our fathers. Now it is the urgent requirement of our nation’s security, and the calling of our time.

So it is the policy of the United States to seek and support the growth of democratic movements and institutions in every nation and culture, with the ultimate goal of ending tyranny in our world.

This is not primarily the task of arms, though we will defend ourselves and our friends by force of arms when necessary. Freedom, by its nature, must be chosen, and defended by citizens, and sustained by the rule of law and the protection of minorities. And when the soul of a nation finally speaks, the institutions that arise may reflect customs and traditions very different from our own. America will not impose our own style of government on the unwilling. Our goal instead is to help others find their own voice, attain their own freedom, and make their own way.

The great objective of ending tyranny is the concentrated work of generations. The difficulty of the task is no excuse for avoiding it. America’s influence is not unlimited, but fortunately for the oppressed, America’s influence is considerable, and we will use it confidently in freedom’s cause.
My most solemn duty is to protect this nation and its people against further attacks and emerging threats. Some have unwisely chosen to test America’s resolve, and have found it firm.

We will persistently clarify the choice before every ruler and every nation: The moral choice between oppression, which is always wrong, and freedom, which is eternally right. America will not pretend that jailed dissidents prefer their chains, or that women welcome humiliation and servitude, or that any human being aspires to live at the mercy of bullies.

We will encourage reform in other governments by making clear that success in our relations will require the decent treatment of their own people. America’s belief in human dignity will guide our policies, yet rights must be more than the grudging concessions of dictators; they are secured by free dissent and the participation of the governed. In the long run, there is no justice without freedom, and there can be no human rights without human liberty.

Some, I know, have questioned the global appeal of liberty - though this time in history, four decades defined by the swiftest advance of freedom ever seen, is an odd time for doubt. Americans, of all people, should never be surprised by the power of our ideals. Eventually, the call of freedom comes to every mind and every soul. We do not accept the existence of permanent tyranny because we do not accept the possibility of permanent slavery. Liberty will come to those who love it.

Today, America speaks anew to the peoples of the world:

All who live in tyranny and hopelessness can know: the United States will not ignore your oppression, or excuse your oppressors. When you stand for your liberty, we will stand with you.
Democratic reformers facing repression, prison, or exile can know: America sees you for who you are: the future leaders of your free country.

The rulers of outlaw regimes can know that we still believe as Abraham Lincoln did: “Those who deny freedom to others deserve it not for themselves; and, under the rule of a just God, cannot long retain it.”

The leaders of governments with long habits of control need to know: To serve your people you must learn to trust them. Start on this journey of progress and justice, and America will walk at your side.

And all the allies of the United States can know: we honor your friendship, we rely on your counsel, and we depend on your help. Division among free nations is a primary goal of freedom’s enemies. The concerted effort of free nations to promote democracy is a prelude to our enemies’ defeat.

Today, I also speak anew to my fellow citizens:

From all of you, I have asked patience in the hard task of securing America, which you have granted in good measure. Our country has accepted obligations that are difficult to fulfill, and would be dishonorable to abandon. Yet because we have acted in the great liberating tradition of this nation, tens of millions have achieved their freedom. And as hope kindles hope, millions more will find it. By our efforts, we have lit a fire as well - a fire in the minds of men. It warms those who feel its power, it burns those who fight its progress, and one day this untamed fire of freedom will reach the darkest corners of our world.

A few Americans have accepted the hardest duties in this cause - in the quiet work of intelligence and diplomacy … the idealistic work of helping raise up free governments … the dangerous and necessary work of fighting our enemies. Some have shown their devotion to our country in deaths that honored their whole lives - and we will always honor their names and their sacrifice.

All Americans have witnessed this idealism, and some for the first time. I ask our youngest citizens to believe the evidence of your eyes. You have seen duty and allegiance in the determined faces of our soldiers. You have seen that life is fragile, and evil is real, and courage triumphs. Make the choice to serve in a cause larger than your wants, larger than yourself - and in your days you will add not just to the wealth of our country, but to its character.

America has need of idealism and courage, because we have essential work at home - the unfinished work of American freedom. In a world moving toward liberty, we are determined to show the meaning and promise of liberty.

In America’s ideal of freedom, citizens find the dignity and security of economic independence, instead of laboring on the edge of subsistence. This is the broader definition of liberty that motivated the Homestead Act, the Social Security Act, and the G.I. Bill of Rights. And now we will extend this vision by reforming great institutions to serve the needs of our time. To give every American a stake in the promise and future of our country, we will bring the highest standards to our schools, and build an ownership society. We will widen the ownership of homes and businesses, retirement savings and health insurance - preparing our people for the challenges of life in a free society. By making every citizen an agent of his or her own destiny, we will give our fellow Americans greater freedom from want and fear, and make our society more prosperous and just and equal.

In America’s ideal of freedom, the public interest depends on private character - on integrity, and tolerance toward others, and the rule of conscience in our own lives. Self-government relies, in the end, on the governing of the self. That edifice of character is built in families, supported by communities with standards, and sustained in our national life by the truths of Sinai, the Sermon on the Mount, the words of the Koran, and the varied faiths of our people. Americans move forward in every generation by reaffirming all that is good and true that came before - ideals of justice and conduct that are the same yesterday, today, and forever.

In America’s ideal of freedom, the exercise of rights is ennobled by service, and mercy, and a heart for the weak. Liberty for all does not mean independence from one another. Our nation relies on men and women who look after a neighbor and surround the lost with love. Americans, at our best, value the life we see in one another, and must always remember that even the unwanted have worth. And our country must abandon all the habits of racism, because we cannot carry the message of freedom and the baggage of bigotry at the same time.

From the perspective of a single day, including this day of dedication, the issues and questions before our country are many. From the viewpoint of centuries, the questions that come to us are narrowed and few. Did our generation advance the cause of freedom? And did our character bring credit to that cause?

These questions that judge us also unite us, because Americans of every party and background, Americans by choice and by birth, are bound to one another in the cause of freedom. We have known divisions, which must be healed to move forward in great purposes - and I will strive in good faith to heal them. Yet those divisions do not define America. We felt the unity and fellowship of our nation when freedom came under attack, and our response came like a single hand over a single heart. And we can feel that same unity and pride whenever America acts for good, and the victims of disaster are given hope, and the unjust encounter justice, and the captives are set free.

We go forward with complete confidence in the eventual triumph of freedom. Not because history runs on the wheels of inevitability; it is human choices that move events. Not because we consider ourselves a chosen nation; God moves and chooses as He wills. We have confidence because freedom is the permanent hope of mankind, the hunger in dark places, the longing of the soul. When our Founders declared a new order of the ages; when soldiers died in wave upon wave for a union based on liberty; when citizens marched in peaceful outrage under the banner “Freedom Now” - they were acting on an ancient hope that is meant to be fulfilled. History has an ebb and flow of justice, but history also has a visible direction, set by liberty and the Author of Liberty.

When the Declaration of Independence was first read in public and the Liberty Bell was sounded in celebration, a witness said, “It rang as if it meant something.” In our time it means something still. America, in this young century, proclaims liberty throughout all the world, and to all the inhabitants thereof. Renewed in our strength - tested, but not weary - we are ready for the greatest achievements in the history of freedom.

May God bless you, and may He watch over the United States of America.