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    Sunday, December 30, 2007

    Indian at Berkshire?

    Mumbai might not be making waves in the world of finance; but Global Indian's quite seem to be. After Rana Talwar at helm of StanC, Pandit's easy takeover at banking giant Citi, this will surely be the icing on the cake....Indian taking over Wizard of Omaha!!? Lets keep our fingers crossed.


    New York: Ajit Jain, named by investors as a possible successor to investment guru Warren Buffett, said the biggest opportunities for Berkshire Hathaway Inc.’s insurance business occur when major catastrophes strike.
    “It’s the politically incorrect answer, but a ‘major cat’ will certainly separate the men from the boys,” said Jain, speaking on Monday (7 May 2007) evening at the New York University. The 55-year-old is the president of a Berkshire Hathaway division that provides reinsurance, or insurance for insurance firms.
    Guiding hand: Warren Buffett looks over the shoulder of Ajit Jain, head of the reinsurance unit with Berkshire Hathaway Inc., while he plays bridge.
    Guiding hand: Warren Buffett looks over the shoulder of Ajit Jain, head of the reinsurance unit with Berkshire Hathaway Inc., while he plays bridge.

    The Stamford, Connecticut-based Jain, who specializes in catastrophe coverage at Berkshire, said he prefers a so-called “major cat” to record industry profit. He insured a sweepstakes by PepsiCo Inc. in which a contestant had a chance to win $1 billion (Rs4,100 crore); Chicago’s Sears Tower, North America’s tallest building; and the 2002 Winter Olympics in Salt Lake City after the terrorist attacks on 11 September 2001.
    Berkshire gets about half its earnings from insurance and capitalized in 2006 on a retreat by rivals wary of covering the US Gulf Coast after the record storm season the prior year. (The number of storms recorded in 2005 was the highest since meteorological observations began to be recorded.) Net income at Berkshire increased 29% to $11 billion in 2006.

    Buffett, 76, has identified three “outstanding” candidates to take over as chief executive officer, he wrote in his 2006 letter to shareholders. Berkshire investors including Gardner Russo & Gardner’s Tom Russo have said Jain, born in India and a Berkshire employee since 1986, is in the running. Jain said he speaks with Buffett daily, discussing potential deals. Buffett taught him to “do things that are rational,” such as selling insurance only when the premium is sufficient compensation for the risk, Jain said. For example, “after 9/11, people got irrational about the risk of terrorism,” allowing Berkshire to increase prices, he said.

    Jain, speaking to a group that included the New York University students and graduates, addressed compensation in the finance industry. “These days, the money is so out of whack on Wall Street that I don’t know how you can turn down what they’re offering.”

    http://www.livemint.com/2007/05/09000156/Buffetts-possible-successor-s.html

    Tuesday, December 25, 2007

    Compensation and Performance measures: Pak used anti-terror aid against India

    What happens when you do not compensation is not backed by performance measures


    WASHINGTON: More than five billion dollars in US aid to Pakistan has often never reached the military units it was intended for to fight Al-Qaida and the Taliban, and was instead diverted to other programmes, the New York Times reported on Monday.

    Much of the money meant to reimburse frontline Pakistani units was channelled to weapons systems aimed at India and to pay inflated Pakistani reimbursement claims for fuel, ammunition and other costs, unnamed US government and military officials told the daily.

    Pakistanis critical of President Pervez Musharraf said he used the reimbursements to prop up his government, and one European diplomat said the United States should have been more careful with its money.

    "I wonder if the Americans have been taken for a ride," said the diplomat, who spoke on condition of anonymity.

    Money intended to repay Pakistan for maintaining 100,000 troops in the restive tribal areas apparently does not reach the troops who need it, officials said.

    "It is not making its way, for certain, we know, to the broader part of the armed forces which is carrying out the brunt of the operations on the border" with Afghanistan, a senior US military official told the Times.

    Despite the vast funds flowing to Pakistan, a US official visiting the border recounted finding members of the country's frontier corps "standing there in the snow in sandals."

    Several soldiers were wearing World War I-era pith helmets and had battered Kalashnikov rifles with only 10 rounds of ammunition each, the official said.

    The two countries have never forged clear strategic goals as to how the US military aid should be spent or how Pakistan could show it was meeting Washington's expectations, according to US and Pakistani officials.

    US aid to Pakistan has come under scrutiny recently in the United States given the strength of Al-Qaida and Taliban cells in Pakistan's north-western tribal areas as well as the failure to secure the capture of Osama bin Laden.

    Musharraf has also been forced by US pressure to ease back on repressive measures, lift emergency rule, shed his military uniform and move the country toward greater democracy.

    The United States provides the five billion in aid to reimburse Pakistan for carrying out military operations against terrorist threats. A separate US program delivers 300 million every year to pay for equipment and training for the Pakistan military.

    The US Congress on Thursday slapped restrictions on the 300 million in traditional military aid, 50 million of which will be withheld until Pakistan shows it is restoring democratic rights.

    US funds are vital for Pakistan's military, with American aid accounting for about a quarter of the military's entire budget, the paper said.

    Pakistani officials interviewed by the New York Times denied their government had overcharged the United States for the "war-on-terror" military aid it gets.

    But US officials cited helicopter maintenance as an example of the funding programme's failure.

    While Pakistan received 55 million dollars for helicopter maintenance for an eight-month period in 2007, the officials said they found out that only 25 million had been received by the Pakistani army for helicopter maintenance for the whole of 2007.

    Allegations that generous military aid to Pakistan has been squandered represent another setback for President George Bush's administration, which has viewed Pakistan as an important ally in the "war on terror."

    Estate tax: Advantage India?


    Will India be the next tax haven? Unlikely, but interesting

    India’s economic growth and booming capital markets have generated unprecedented wealth for Indian promoters. Suddenly, India has billionaires coming out of its ears, more than Japan by one count. Yet, India’s entrepreneurs are lucky: they can pass most of their wealth to their children without too much hindrance.


    Unlike many advanced market economies, India has no estate tax, or estate duty as it was known in India. Estate duty was introduced in 1953 and was abolished way back in 1985, when V P Singh was the finance minister. It is not payable on deaths occurring after March 16, 1985.

    World wide, the estate tax, also sometimes called the death tax, is very much a reality. Wherever it is levied, it is usually payable on the value of the accumulated savings (by way of assets accumulated) of a deceased person. The policy intention is to bring about inter-generation equity, i.e., to ensure the children of the rich don’t have too much of an advantage in life compared to the less privileged.

    On the other hand, many tax experts slam the estate tax — known as the Inheritance Tax in the UK — as a-hard-to-collect levy, which penalises savings and investment. It also encourages tax avoidance by way of creation of trusts and shell companies to which property and other assets can be transferred.

    Tax rates vary widely across countries. Data collated for 2005 by PricewaterhouseCoopers for 50 countries shows Japan with a top rate of 70%. South Korea’s rate is 50% followed by the US (46%), and France and UK with 40% each. On the other hand, many countries, including India, do not levy estate tax. According to the PwC study, the 24 countries with no estate tax include China, Russia, Australia and Malaysia.

    In virtually all countries with estate tax, the nominal rates usually apply only for assets above a certain exemption limit, which is usually set high enough to exclude a large chunk of taxpayers. In the US, for instance, the estate tax is payable after an exemption of $2 million.

    The US law is, in fact, very complicated. As part of President Bush’s 2001 tax cuts, the basic exemption limit was raised from $1 million in 2001 to $2 million, at which level the 46% rate kicks in. In 2010, the estate tax is repealed for a year. Then after 2011, the basic exemption drops to $1 million and the tax rate rises to a rather high 55%. There are jokes about the murder rate for rich people shooting up in 2010.

    The June 2006 Tax & Budget bulletin of the libertarian Cato Institute states, “The estate tax is probably the most-inefficient tax in the US. It has a high marginal rate and is very difficult for the government to administer and enforce. It has also created a large and wasteful estate planning and avoidance industry. The industry overflows with...lawyers and accountants... creating financial structures to minimise the tax burden using trusts, life insurance and private foundations.” The institute wants the US to scrap the estate tax, which accounts for just over 1% of federal tax revenues.

    In the UK, the inheritance tax is payable if the taxable value of the estate is above £285,000 (2006-07 tax year) according to the British government’s website. The term ‘Estate’ is defined as “broadly speaking...everything you own at the time of your death, less what you owe,” according to the website. In addition, it might be payable on assets given away by the deceased during his/her lifetime, including property, money and investments. The tax kicks in over the threshold value.

    The main argument in favour of estate tax is that it levels the playing field between the rich and the poor. The main argument against is that it discourages savings and investment, and hence capital accumulation. Obviously, a high rate of estate tax is a disincentive since a person would find it difficult to pass on his wealth to his descendants.

    Further, since the tax is levied on the net value of assets, not on income, it can create a major liquidity problem for the inheritor who has to pay. This is because the tax is a lump-sum payment that may exceed revenues from a particular set of assets. Indeed, it can potentially create an incentive to liquidate the business.

    In India, estate duty was abolished partly because it amounted to double taxation, since stamp duty is in any case levied on transfer of property to heirs. Stamp duty is currently between 7-9% in most states and is in some way a quasi-estate duty. The Centre wants states to bring it down to the 4%-6% range. A stamp duty is, however, only a rough proxy for estate duty since it is payable on all property sales/transfer while the latter is payable only on the death of a property owner.

    In general, all taxes which are levied on assets, such as estate tax or the wealth tax tend to result in the creation of complex tax avoidance structures. Sweden’s new centre-right government has recently decided to scrap the country’s 1.5% wealth tax, which in that country is levied on all persons with wealth exceeding $2,00,000.

    The tax is estimated to have led to billions of dollars of capital flight. Ingvar Kamprad, the owner of iconic furniture maker Ikea and Sweden’s richest man controls his wealth, estimated at over $20 billion, through foundations based outside Sweden.

    Enormous donations to foundations with a charitable purpose, most famously by Warren Buffet and Bill Gates, may well be part of the Christian tradition but high estate tax is undoubtedly a major driver. Typically, the children of the wealthy tend to be associated with the trusts set up by mega creators of wealth like Buffet or Gates. In both Europe and the US, broadly speaking centre-left parties tend to support estate taxes while centre-right parties (such as Republicans in the US and Tories in Britain) tend to favour their abolition.

    Can India attract tax tourists from the US or other high estate-tax countries? That’s right now a theoretical possibility, experts feel, given the poor physical infrastructure and lack of adequate legal framework, including the absence of complete capital account convertibility.

    Also, it is far from clear what view the IRS, the US government’s famous tax arm, will take of persons relocating to India. The US claims to tax income generated worldwide by all its citizens, though in practice major companies use tax havens such as the Cayman Islands to minimise the dues payable to Uncle Sam. Still, it’s a possibility that India can exploit in the future as it gets richer.

    (With inputs from Bakul Chugan)

    Wednesday, December 19, 2007

    Re has appreciated less than yuan


    leave the economists behind; its the populist who decides the numbers....I was badly looking for someone to come out with some good analysis on this and who else other Aiyar would!
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    9 Dec, 2007, 0230 hrs IST,Swaminathan S Anklesaria Aiyar, TNN


    Hundreds of columns have been written on the exchange rate policy of the Reserve Bank of India, and its decision to let the rupee appreciate sharply this spring. However, what was earlier a debate mainly between technocrats has suddenly assumed populist, alarmist tones.

    In Parliament, commerce minister Kamal Nath has said the appreciating rupee has hit labour-intensive exports such as textiles, leather goods and gems & jewellery, and that one to two million workers may have lost their jobs. Following up, industrialist and Rajya Sabha member Rahul Bajaj has written in this newspaper suggesting that 2.8 million people have lost their jobs.

    The numbers are so huge that, if they were anywhere near the truth, we would have a major human tragedy on our hands. In fact, we have only tall stories and data inflation aimed at scaring people rather than informing them.

    I toured Gujarat in the run-up to the state election, and talked to a wide range of people about the many issues that might determine the outcome. Not a single person mentioned worker distress in export industries as an election issue. Nor did I see this mentioned in the innumerable TV discussions of the Gujarat elections.

    Now, at election time opposition parties are given to exaggerating rather than hiding distress issues. Narendra Modi was fighting principally on an economic development platform, and Congress speakers were looking desperately for flaws in his platform. Gujarat is a major centre for exporting both textiles and gems. If indeed workers were being thrown out of work by a strong rupee, this would have been a huge election issue. In fact, it was a non-issue.

    I myself toured Ahmedabad and Saurashtra. I can state categorically that the garment and textile areas there were not hit by mass unemployment. Indeed, at least one textile magnate, Vinod Arora of Aarvee Denims, was positively gung-ho about the future of his industry.

    I did not visit the diamond-cutting areas around Surat. But my Economic Times colleagues went there, and found no unemployment arising out of a strong rupee. They found signs of declining foreign orders, but this had not translated into fears of job losses among diamond cutters. The electoral impact was negligible. In which case the economic impact must be close to zero too. Proponents of a weak rupee are altogether more agitated than the people on whose behalf they claim to be agitating.

    Now, ET correspondents have reported job losses running into thousands in Tiruppur. Clearly, there is some distress in some areas. But it is not an all-India calamity. There is a world of difference between losing a few thousand jobs and two million. Some job losses are inevitable, indeed desirable, in a market economy, and constitute transitional pains, not human disaster. Those who claim that a strong rupee is costing millions of jobs are talking through their hats. We need to shout this from the rooftops, since many media folk are falling for false propaganda on this score.

    Indeed, the notion that modest changes in the exchange rate can produce such huge swings in employment is obviously false. If a modest rise in the rupee can kill two million jobs, a corresponding fall in the rupee should create a similar number of jobs. Alas, that did not happen when India had big currency declines in the past. Nor will it happen if the rupee now falls by 13%.

    Export growth in April-September was 26.9% in dollar terms, and provisional data suggest 35.6% growth in October. Even allowing for rupee appreciation of 13%, this constitutes solid export growth. Exporters may be under somewhat more pressure than before, but are not throwing millions out of work.

    What exchange rate policy should we have? I have written much less on this topic than many other observers, because I do not have strong views on the subject. I see some substance in the position of those who say the RBI should focus only or mainly on inflation control, letting the exchange rate find its own level. I also see some substance in those who think the RBI should focus on macroeconomic management over and above inflation. Finally, I see some substance in the argument of those who want the RBI to focus on the exchange rate above all, to promote exports and employment.

    Most people measure the rupee’s strength against the US dollar. The RBI is more sophisticated: since 1973 it has aimed to keep constant the real effective exchange rate, to protect exporters after accounting for changes in the nominal exchange rate and inflation. Many technocrats see this as a successful policy worth maintaining. Others point to China as a superior example of a country that has refused to kow-tow to foreign pressure to appreciate.

    However, the notion that the rupee has appreciated much faster than its rivals does not stand up to detailed examination. Certainly the 13% appreciation of the rupee since early 2007 is steeper than experienced by most rival currencies. But if we start our comparison in July 2005, when China first began to let its currency rise, we find that the rupee has actually risen less than the yuan!

    See the accompanying table. It shows that, compared with July 2005, the rupee has risen only 9.4% against the dollar. Much stronger rises have been registered by China (10.9%), South Korea (11.1%), Malaysia (12.6%), Thailand (20.2% and Brazil (25.4%). In no way can the rupee’s appreciation be called steep or extraordinary.

    So, what’s the fuss about? The answer lies in the fact that the rupee actually weakened against the dollar from mid-2005 to mid-2006, at a time when other Asian currencies were strengthening. This has now been reversed in 2007, somewhat sharply. Had the RBI allowed rupee appreciation from 2005 onward in line with China, the change in 2007 would not have been so sudden.

    Seen in this light, the main failing of the RBI is not that it has made the rupee too strong, but that it should have started the process two years earlier. Had it done so, the change in the rupee’s value would have been more gradual and corporations would have adjusted much more smoothly.

    The RBI’s second failing is that inflation in India has been higher than in most rival countries. This erodes our competitive edge. Whether rising productivity offsets this remains to be seen.

    ------------------ more to add onto Aiyar is that rising rupee also helps in controlling import prices. Given that many Indian textile manufacturers are expanding, this is the time to import those expensive machines. And yes go on the M & A rampage. Leave alone capital expenditure, think about the good effect it has in acting against the rising crude oil prices. All I want to say is that 'every coin has two sides'! -Vj

    Thursday, December 6, 2007

    The new wars of religion



    An old menace has returned, but in very different forms

    after a long time ...an unbiased of religion and conflicts

    EARLIER this year Iran's President Mahmoud Ahmadinejad, speaking to his country's parliament, posed two questions: “Who are our enemies?” and “Why do they hate us?” He described an axis of evil, with Iran's enemies being “all the wicked men of the world, whether abroad or at home”. The root cause of their hatred was religious—a loathing of “whomsoever should serve the glory of God”. Having described George Bush's atrocities, he told the cheering MPs, “Truly, your great enemy is the American—through that enmity that is in him against all that is of God in you.” Fortunately, Iran would not fight alone: it had the support of Muslims around the world. Be bold, he advised, and “you will find that you act for a very great many people that are God's own.”

    The Bridgeman Art Library Oliver's army

    For Mr Ahmadinejad, read Oliver Cromwell; for Iran, England; and for America, Catholic Spain. The quotes above come from a speech made by Cromwell to the English Parliament in 1656. Parliament then passed an oath of loyalty in which English Catholics were asked to disown the pope and most of the canons of Catholic belief, or face losing two-thirds of their worldly goods. Shortly afterwards Cromwell invaded Ireland.

    “Faith is a source of conflict,” reads a sign at St Ethelburga's Centre for Reconciliation and Peace in the City of London—adding that it can also be “a resource to transform conflict”. Appropriately, the centre was built in a church blown up in 1993 by Irish terrorists, brought up, no doubt, with tales of Cromwell's atrocities.

    Conflict, of course, does not necessarily equate to war. But there are some depressing echoes of Cromwell's time.

    •Faith is once again prolonging conflict. Religion is seldom the casus belli: indeed, in many struggles, notably the Middle East in modern times, it is amazing how long it took for religion to become a big part of the argument. But once there, it makes conflicts harder to resolve. A squabble over land (which can be divided) or power (which can be shared) or rules (that can be fudged) becomes a dispute over non-negotiable absolutes. If you believe that God granted you the West Bank, or that any form of abortion is murder, compromise is not really possible.

    •Once again, politicians are stirring up religious passion. Mr Ahmadinejad may not have told Muslims that the Israeli “has an interest in your bowels” (as Cromwell did of Spaniards), but he has called for Israel's removal and denied the Holocaust. Osama bin Laden rages that Islam is under sustained attack: any Muslim who “collaborates” with the West is an apostate.

    American leaders have been more careful, but many use religious imagery. In his new book, “God and Gold” (see article), Walter Russell Mead compares Ronald Reagan's denunciation of the Godless Soviet Union (the “Evil Empire”) to Cromwell's speech. Franklin Graham spoke for many on the religious right when he denounced Islam as a “very evil and wicked religion”. American conservatives seem undecided on whether the battle against “Islamofascism” is the third world war (Newt Gingrich) or the fourth (Norman Podhoretz).

    •Once again, outsiders are rushing to defend their religions: religious scraps attract money and soldiers. Just as Guy Fawkes, Britain's most famous religious terrorist, hardened his radical beliefs when fighting for Catholicism in the Netherlands, European Muslims have gone to defend their faith in Kashmir, Chechnya and Iraq. Some of the most fervent supporters of India's Hindutva movement come from the diaspora. Many migrants define themselves by their faith, not their new home.

    •One of the world's great religions, Christianity, split into Catholic and Protestant in the 16th century. Now Islam is having to contend with a sharpening split between Sunni and Shia. Once again nation states are weak: most Middle Eastern countries are recent creations. And there is a ring of instability on Islam's southern frontier, which runs roughly along the 10th parallel from West Africa to the Philippines.

    •Terrorist outrages are once again presumed to have religious connections, as they would have done in Cromwell's time. In the 1970s terrorism seemed to be the preserve of Maoist guerrillas, middle-class Germans and Italians or the then very secular (and partly Christian-led) Palestine Liberation Organisation. Now three out of the four most likely flashpoints for nuclear conflict—Pakistan-India, Iran and Israel—have a strong religious element. The only exception is North Korea.

    Wars can be Godless too

    It is possible that these similarities could escalate into something horrifying. A confrontation between nuclear Iran on one side and Israel and America on the other would reverberate around the globe. But the idea that the world is reverting to a former age is too simplistic.

    Most obviously, humanity can find plenty of reasons for genocide and suffering without troubling God. “The 20th century was the most secular and the most bloody in human history,” argues George Weigel, a leading American conservative. What he calls “the Godless religions of Nazism and communism” killed tens of millions of people. Each had its theory of salvation, its rites, its prophets, its sacred places and its distinctive idea of morality; but communists and Nazis did not use God to stir up passions. The Cambodian genocide was similarly secular.

    Where it does exist, religious conflict is now far less of a top-down affair. No government officially approves of killing people solely because of their religion, and no significant religious leader sanctifies that killing by blessing armadas or preaching crusades. Last year the pope took issue with Islam in a speech at Regensburg, but he also opposed the Iraq war. Most Islamic authorities preach non-violence. Ayatollah Sistani, the most revered Shia on the planet, has often urged restraint in Iraq.

    Of course, this does not prevent individual clerics from committing appalling acts of brutality: Catholic priests helped torture people in Argentina, Buddhist monks have led murderous attacks in Sri Lanka and imams have encouraged suicide-bombing in Israel. But every zealot interviewed for this special report, including those with blood near their hands, insisted that his religion was peaceful.

    Meanwhile, the power of governments to control religious politics has declined. The wars of religion took place in an age of “cuius regio, eius religio”, where the monarch dictated the religion. England once turned to Protestantism because Henry VIII found the Catholic church's rules on matrimony irksome. Nowadays, nobody is trying to improve America's relations with the Middle East by marrying off the Bush twins to Arab princes.

    The new battles

    With national armies no longer marching under religious banners, grievances have reappeared in several guises. None of them is easy for the West to deal with.

    The one that gets most attention is terrorism—especially Islamic terrorism. States are certainly actors in this: Iran may not openly wage religious war, but it has been happy to back Hizbullah in Lebanon and Hamas in Palestine. But then neither Hamas nor Hizbullah is a purely sectarian organisation. Like the IRA in Ireland, they both have political-territorial objectives.

    Most of the main jihadist terrorist organisations are bottom-up affairs. Mr bin Laden would no doubt like to control another state (as he once did from Afghanistan). But his organisation has been able to mount attacks and recruit volunteers without help from a government.

    The second way in which religion thrusts itself into politics is inter-communal violence. Once again, other forces are often at work, such as tribalism in Nigeria or nationalism in India. But religion supplies the underlying viciousness. Sectarian violence has been responsible for most of the killing in Iraq in the aftermath of the war. Some 68,000 Sri Lankans have died since 1983. Other, lower-level conflicts, such as Catholics and Protestants attacking each other in Mexico's Chiapas, occasionally flare up. Outside parties can play a role in stoking up such struggles (and supplying arms), as Iran has done in Iraq and Syria has done in Lebanon. But most of these fights have a local, tit-for-tat feel. The violence is often set off by events such as marches, feast days or elections.

    Third, there is state-based repression, where religion is either the target or the motivation. In the Muslim world the repression is sometimes by theocracies (like Iran or Saudi Arabia), against irreligious sorts, such as adulterers, heretics and homosexuals. But it also goes the other way, with secular states (Syria, Egypt, much of North Africa) discriminating against religious dissidents. In the most bizarre example, China recently banned Buddhist monks in Tibet from reincarnating without government permission. The religious-affairs agency explained that this was “an important move to institutionalise management of reincarnation”. The real purpose is to prevent the Dalai Lama, Tibet's exiled spiritual leader, from being succeeded by someone from outside China.

    Yet the foremost way in which religion has expressed itself around the world has been more peaceful: the ballot box. Religious people have either formed religious parties (such as India's BJP) or converted secular ones into more faith-driven outfits (such as America's Republican Party). In places where religion was frowned upon by the state, such as Mexico or Turkey, greater freedom has allowed the pious to form parties, such as the Catholic-oriented PAN party or the Islamic AK Party.

    And it has not just been a case of democracy helping religion. Timothy Shah of the Council on Foreign Relations argues that it can go the other way too. By his calculation, more than 30 of the 80 or so countries that became freer in 1972-2000 owed some of the improvement to religion. Sometimes established churches helped to push for democracy (eg, the Catholic church in Poland), but more often it was pressure from the grassroots: religious people usually look for a degree of freedom (if only to pursue their faith).

    All this means that the modern wars of religion are mercifully less violent and all-consuming than their predecessors; but also that tackling the politics of religion is more awkward than it used to be. Culture wars are now global (a subject to which this special report will return).

    This complicates foreign policy enormously. Should America focus on the tiny number of angry Muslims with guns, or the millions who have voted for Islamic parties in Egypt, Pakistan, Turkey, Algeria and Palestine? If most religious fanatics were bent on conquest and terror rather than democracy, their causes would be easier to discredit. And if religion were the sole cause of the conflicts, it would be easier to work out “why they hate us”.