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EDITORIAL SuNDAY, MARCH 25, 2018 4 Acting Editor & Publisher : Jobaer Alam Telephone: +8802-9104683-84, Fax: 9127103 e-mail: editor@thebangladeshtoday.com Sunday, March 25, 2018 Effects of Taka’s falling value W hy currency values are so important to us ? It is important for the simple reason or in most cases from the concern of millions and millions of people who are not wheeler-dealers and know no way of doubling, trebling or quadrupling their money resources overnight from keeping their nose above the water. Small people put away something for the rainy ay as the adage goes out of a comfortable feeling that the unspent money would buy them good and services in value in the same or near the same measure when they had put aside that amount. When they find to their great dismay that theirs saved amounts will not even buy a fraction of the things ten or twenty years down the road, not only this makes a mockery of the advise that people should save for their own good and that of the national good, it also involves great hardships on people.. People in the normal walks of life and they are the overwhelming majorities in all countries, are not adept at cunning, crimes and other qualities that would enable them to stay ahead of living costs no matter however high they may soar. They have no choice but to plan their future and the costs of living must fill the slots they have projected ; otherwise they must be poorer with their money resources getting far outstripped by what would be required to maintain even their current lifestyle sometime in the future. Salaried persons have their provident funds, terminal benefits, gratuities, saving deposits in banks and in other schemes. They make a sacrifice in their current consumption and keep aside the amounts out of a hope that the same will fulfill their requirements for ready cash to materialize plans such as building of a house, buying of an apartment, paying for a daughter's marriage or a son's higher education and so on. But when such a saver finds out how worthless his painstaking saving effort for a long period has been from the plummeting value of the currency, then his or her great bitterness and frustrations should be understandable to all those who had suffered in the same manner. This writer knows a gentleman who retired as a midranking civil servant two years ago. He has a plot of land in Dhaka which was purchased many years ago when land prices were reasonable. He had planned for the day when he would build a house on it in the sunset years after his retirement. The various estimates of house building materials at the time when he started saving for the purpose gave him assurance that he would be in a position to build a house even without taking a loan from the House Building Finance Corporation (HBFC). But all his dreams have been shattered. After retirement and the settlement of his dues such as provident fund, gratuity, insurance payments, etc., he found out that what he possessed amounted to pittances in today's requirements to either build a decent house or pay well for occasions such as the wedding expenses of his grown up daughter and even the private university fees of his only son. Thus, this gentleman seems headed for a fate which is dismal to say the least. He would soon be forced to change his status fairly soon from one having a middle class existence to a lower middle-class one or worse, fairly soon. He had to leave his government quarters after retirement and finds renting accommodation in a decent place or apartment in the city simply impossible. The several hundred thousand Taka he has as retirement benefits would last long many years ago when Taka's value was much higher and held steady. But this amount is not enough today to enable him to live in middle class comfort for even a year. So, he had to practice caution and count his money while renting a home in a semi-slum area of the city that led to his declassing of sorts. The present rate of inflationin Bangladesh is declared to be 7 per cent, according to official sources but unofficially the rate is well above the double digits. Whether it is inflation in the economic sense or the outcome of unethical businesses practices, people's experience is that the value of their savings have been eroding continuously without a pause. The loss of Taka's value used to be not so quick in the past. The only difference now is that this loss has been accelerating in recent years that has created a specter of a vast number of people getting declassed and actually going down in the class hierarchy. One hears plenty of inspirational utterances from government leaders to the effect that people's income are growing and people in increasing number are escaping to an existence above the poverty line. But the realities tell a different story of middle class people turning into lower middle class people and the latter in turn joining the ranks of the poor. The story is also one of the poor getting poorer from living costs very fast outpacing earnings and buying powers of non affluent sections of people decreasing dramatically from the lower purchasing power of the currency as such or the lowered value of their savings. This process must stop to make any sense out of the talks of poverty reduction and to this end it is supremely important to stabilize the value of the Taka. In a country like the United Kingdom, for instance, the annual inflation rate seldom rises above 2 or 3 per cent and, if it does, it creates a great hue and cry for bringing the same down at the fastest. People there are to be found is agreeable to compromise their present and future living standards by passively allowing their living standards to decline from losses in the value of the Pound or in their savings. No such concern is seen in Bangladesh where it matters to really fight inflation, price rise or irrationally higher living costs - whatever the name or the ills that lead to erosion in the value of the currency. But the greatest number of people in the country are paying through their nose for such unconcern. The case for sovereign GDP-linked bonds The time has come for national governments around the world to start issuing their debt in a new form, linked to their countries' resources: GDP bonds. The instruments, with coupons and principal that rise and fall in proportion to the issuing country's gross domestic product, promise to solve many fundamental problems that governments face when their countries' economies falter. And, once GDP-linked bonds are issued by a variety of countries, investors will be attracted by the prospect of high returns when some of these countries do very well. This new debt instrument is especially exciting because of its monumental size. Although issues may start out small, they will be very important from the outset. The capitalized value of total global GDP is worth far more than the world's stock markets, and could be valued today in the quadrillions of US dollars. Now an authoritative open-source online handbook just published by the Center for Economic Policy Research, Sovereign GDP-Linked Bonds: Rationale and Design, explains how governments can do this. I co-edited the book with Jonathan D Ostry of the International Monetary Fund (IMF) and James Benford and Mark Joy of the Bank of England. The book draws on work commissioned by the recent Chinese and German presidencies of the Group STATES have an image of themselves that inspires their policies in the global order. A basic principle that governs their foreign policy emerges. For centuries, Britain adhered to the principle of balance of power in Europe. It required the country to ensure that no power emerged on the continent that was more powerful than all the others, thus posing a threat to Britain's security. The United States announced its Monroe Doctrine to keep European powers out of Latin America, which ensured US hegemony in that region. Russia and later the Soviet Union were anxious about external influences in the Eastern European countries. Similarly, India developed a doctrine by 1946 because the Congress spokesman on foreign affairs, Jawaharlal Nehru, had set notions about the country's role in Asia, especially in South Asia, and in the world at large. On independence he became India's prime minister as well as its foreign minister. He sought for India a clear ascendancy over its neighbours and aspired for it a role in world affairs - eventually the status of a great power. To this day, neither he nor any of his successors realised that that aspiration itself required stable, friendly relationships with its neighbours. Modi's NSA doesn't believe in friendly relations. The BJP's first prime minister, Atal Behari Vajpayee, was no chauvinist. But the present BJP government headed by Narendra Modi is very much so. He and his national security adviser (NSA), Ajit Doval, are determined to wipe out the Nehruvian approach in all fields. Modi, an RSS Over the past few weeks, threats have been made on social media against Syrian refugee women in Germany, especially those filing for divorce. These campaigns have escalated following the actions of a Syrian known as Abu Marwan, who murdered his exwife and broadcast a live video on Facebook moments after committing the crime. I have watched part of the video posted by this person, but could not stare into the murderer's face; instead my attention was fully drawn to the boy standing in the corner while his father explained his crime, argued for it, and justified it. The little boy stood listening to his father as he threatened Syrian women, who have found in asylum in Western countries the legal support that might rid them of domestic violence. Marwan announced very openly that his crime was a lesson for all women who want to get rid of their husbands, and warned that they would face a similar end. There are many details surrounding the crime, starting with fleeing Syria, seeking asylum, integration difficulties, and later on legal separation under German civil law and the consequent financial blackmail that the husband used against his ex-wife - according to their neighbors - while she sought child custody. However, Marwan justified his crime with a word that is often heard after murders against women in our communities - "honor"; an empty word that murderers use to justify their crimes. Despite the widespread denunciations of Marwan's crime, another aspect has of 20, with the collaboration of 20 leading economists, lawyers and investors. Its publication carries endorsements from Andy Haldane, executive director of financial stability of the Bank of England, and Maurice Obstfeld, economic counselor and research director at the IMF. I have been advocating something like GDP-linked bonds for 25 years. In my 1993 book Macro Markets, I described the world's GDPs as the "mother of all markets" and emphasized a form of debt that I called "perpetual claims." But I did not work out a real plan of implementation and advocacy. Sovereign GDP-Linked Bonds does just that. The basic idea is simple enough. Governments issue GDP-linked bonds to raise funds, just as corporations issue RoBERT J SHIllER A.G. NooRANI shares. By issuing such bonds, governments pledge to pay in proportion to the resources they have, measured by their countries' GDP. The price-to-GDP ratio of GDP-linked bonds is in essence analogous to the price-toearnings ratio of corporate shares. The difference is that GDP is an order of magnitude larger than corporate profits represented by the stock market. The basic idea is simple enough. Governments issue GDP-linked bonds to raise funds, just as corporations issue shares. By issuing such bonds, governments pledge to pay in proportion to the resources they have, measured by their countries' GDP. The price-to-GDP ratio of GDP-linked bonds is in essence analogous to the price-to-earnings ratio of corporate shares. The difference is that GDP is an order of magnitude larger than corporate profits represented by the stock market. As Sovereign GDP-Linked Bonds argues, the issuance of GDP-linked bonds will create "fiscal space" - a cushion for exigencies - for some countries. When government debt payments are fixed in currency terms, as they typically are today, countries get into trouble. In a financial crisis, they become over-leveraged, unable to borrow more, and forced to take drastic action that may impede recovery from A hawkish doctrine activist, had no grounding in foreign affairs. This did not deter him from declaring that China is expansionist some years ago. His speeches on Pakistan as chief minister of Gujarat were laced with communal jibes ("Mian Musharraf"). He had to perforce rely on an 'expert' who shared his worldview. He had not far to look to find one. It was a former director of the Intelligence Bureau (IB) Ajit Doval. In article after article in the press he revealed himself as a card-carrying hawk. A former heard of RAW, A.S. Dulat, called him "the hawkish Ajit Doval". Modi appointed him as NSA almost immediately after he became prime minister in May 2014. Upon assuming office, Doval, not one to hide his genius, began systematically imposing his footprints on the course India has since followed in its external relations. This is particularly true in India's relations with Pakistan. emerged as a result. Many have justified such crimes by blaming the wives. Some accused Syrian women of seeking asylum in Europe solely to enjoy personal freedom and leave their husbands by refusing "family reunification," which is a European law that allows refugees to reunite with their loved ones. There are also campaigns that accuse refugee women of going against Arab and Islamic traditions. There were even many comments on Marwan's video by people saluting him for preserving his "honor." Days after Marwan's crime, another similar attack reportedly took place in Germany. A Palestinian man called Abdul Rahman attempted to murder his sister, broadcast his crime, and claimed he was defending his "honor." However, his sister, Alaa, miraculously survived. If Marwan and Abdul Rahman were still in their home countries when they DIANA MoukAllED A 1968 batch IPS officer of the Kerala Cadre, he went on to perform exploits with all the gusto of a commando - infiltration into the then underground Mizo National Front to win over its top commanders; walk into the Golden Temple in Amritsar, posing as a Pakistani agent, months before Operation Black Thunder in 1988, to obtain intelligence; and a seven-year tour of duty in Pakistan. The articles he wrote in the decade The BJP's first prime minister, Atal Behari Vajpayee, was no chauvinist. But the present BJP government headed by Narendra Modi is very much so. He and his national security adviser (NSA), Ajit Doval, are determined to wipe out the Nehruvian approach in all fields. Modi, an RSS activist, had no grounding in foreign affairs. This did not deter him from declaring that China is expansionist some years ago. His speeches on Pakistan as chief minister of Gujarat were laced with communal jibes ("Mian Musharraf"). between his retirement as director IB in 2005 and assumption of office as NSA in 2014 reveal his mindset. On July 7, 2014, the UN Military Observer Group for India and Pakistan, at 1-AB Purana Qila Road in New Delhi, was asked to vacate its bungalow and stop its work. The visiting UN peacekeeping chief Hervé Ladsous flatly told New Delhi that UNMOGIP was there pursuant to a UN Security Council resolution, and that its mandate could only be revoked by the UNSC. A little homework committed their crimes, they would probably have used the common penal code mitigation of "rage" or "honor killing," and someone would have legally helped them obtain a reduced sentence. But the crimes happened in Germany and not Syria, Jordan or Lebanon - and here lies the difference. Female refugees in the West have personal freedom previously denied to them. Many men feel this threatens their masculinity - and the result is often tragic. Let us compare refugee communities in the Arab world to those in Germany and the West. In Lebanon, Jordan, Turkey and, of course, Syria, marriages are governed by social norms and religious laws that allow child marriages to the point where the practice has become a frightening phenomenon. Here in local refugee communities, a father has almost the crisis. Taxpayers, rather than willing investors, are forced to become the final bearers of risk. Issuing GDP-linked bonds is akin to buying insurance against economic distress. The crises that erupted in such countries as Ireland and Greece a decade ago would not have been so severe had their debt been GDPlinked Issuing GDP-linked bonds is akin to buying insurance against economic distress. The crises that erupted in such countries as Ireland and Greece a decade ago would not have been so severe had their debt been GDP-linked. And the same is true today: Investors around the world will continue to accept the risk, given the unlimited upside to investing in entire economies. And they can achieve the ne plus ultra of diversification by holding GDP-linked bonds from around the world. One may wonder why countries have hardly ever issued GDP-linked securities. The reason is straightforward: Financial innovation is difficult. Financial inventions are as complex as engineering inventions, and many details must be worked out to make things work well. We have almost no examples of successful GDP-linked bonds for the same reason we did not see laptop computers until the late 1980s. It takes time and energy to innovate. Source: Asia times would have indicated the delicacy of the matter; namely that recourse to the UNSC would have opened a can of noisy diplomatic worms. The snub could have been averted. Doval's communal outlook is reflected in his description of Kashmiri Pandits as its "civilisational inheritors". During a lecture in Hyderabad in 2010, Doval called Pakistan a "failing and degraded state". From this followed prescriptions, which he announced in speech after speech. In February 2014, at the Shastra University, he asked: "So, how to tackle Pakistan?" He urged India to shed its "defensive mode" because "Pakistan's vulnerabilities are many times higher than us [sic]. Once they know that India has shifted its gear from defensive mode to defensive-offence, they will find that it is unaffordable for them. You may do one Mumbai, you may lose Balochistan." The emphasis was Eisenhower's secretary of state John Foster Dulles' policy of 'massive retaliation'. Doval explained, "Similar disproportionate responses should be given at the Line of Control for firing and make them feel the pain; set red lines for talks, which when crossed would be grounds for calling off talks, and stick with it." This explains why the talks were repeatedly called off, "the surgical strike" along the LoC and the present impasse in the dialogue between India and Pakistan. Modi follows the Doval line. In his speech at the Red Fort on Aug 15 2016, he spoke of Balochistan, Gilgit-Baltistan and Azad Kashmir. This policy has failed. Source: Dawn Men who can’t handle it when the law gives women rights Despite the widespread denunciations of Marwan's crime, another aspect has emerged as a result. Many have justified such crimes by blaming the wives. Some accused Syrian women of seeking asylum in Europe solely to enjoy personal freedom and leave their husbands by refusing "family reunification," which is a European law that allows refugees to reunite with their loved ones. There are also campaigns that accuse refugee women of going against Arab and Islamic traditions. the unchallengeable right to child custody, and a man has a legal right to polygamy, divorce, and twice the woman's share of inheritance. All these laws take the men's side, but in Europe they are a reason for condemnation and legal intervention. The German media has shared a variety of complaints that have reached the courts: There are women who complained of domestic violence by their husbands, while others sued their spouses for cheating on them. Some women have reported receiving threats from family members inside Syria if they filed for divorce, and there have been many cases in which refugee women refused to be reunited with their husbands through family reunification. These two recent crimes and the controversy they have raised will further draw attention to the social phenomena emerging in refugee communities in Europe. The likes of Marwan and Abdul Rahman feel they have lost their masculinity in a country like Germany, and are condemned to resentment and helplessness. It is true that not all hate-filled men become criminals, but the spread of speech that justifies a crime creates a huge gap that we must face. Yes, there is in the West the phenomenon of refugee women who decide to seize the opportunity of having the law on their side. This results in a great deal of justice for the weak in the land of the mighty, which is precisely why it is the land of the mighty. Source: Arab news
SCIENCE & TECH SUnDAy, mArCH 25, 2018 5 Cambridge Analytica: A weapon of manipulating minds rICHArD WolFFe How on earth did Donald Trump win the presidency when he lost the popular vote by such historic margins? To put this in perspective: John Kerry lost the popular vote in 2004 by almost the same number of votes as Donald Trump 12 years later. This is not a small question, to be noodled over by disgruntled Democrats and political scientists. It lies at the heart of the likely impeachment of Trump himself, and it will dominate at least the next two US elections. The answer is fundamental to our democratic culture of fair elections, the rule of law, the role of technology and the free media. Now there are any numbers of factors that could have swung 40,000 votes in three states - Michigan, Wisconsin and Pennsylvania - which created the catastrophic fluke of the Trump presidency in the electoral college. But there are no factors as large and persistent as a weaponized Facebook - the trusted and entirely unregulated delivery vehicle for an astonishing amount of highly targeted disinformation. Without Facebook, there would have been no Pizzagate, and the hacked DNC emails would have struggled to reach their intended audience. The strangely Russialoving Green party would never have tallied enough votes to skew those three battleground states towards Trump. All roads lead to Facebook and the small company that plundered its vast user data: Cambridge Analytica. Together the social network looks less like a group of friends and more like the Silk Road black market of arms and drugs dealers. Alexander nix, the now suspended Ceo of Cambridge Analytica. Thanks to the reporting of the Observer, the Guardian and Channel 4, we now know that Cambridge Analytica could happily arrange for a candidate to fall into a compromising scandal with a Ukraine prostitute or a bribery sting. As the now-suspended CEO, Alexander Nix, put it so well: "It sounds a dreadful thing to say, but these are things that don't necessarily need to be true as long as they're believed." In his snooty British accent, Nix is only saying - and converting into highly effective digital marketing - what Trump has long believed: lies don't matter as long as they're believed. So while it might seem grandiose for Nix to boast that he played a central role in getting Trump elected, he also identifies several key truths that Trump supporters may refuse to believe. First, the use of posts from fake activist groups that blur the lines between a campaign and outside groups. "This stuff infiltrates the online community, but with no branding, so it's unattributable, untrackable," Nix helpfully explained to undercover reporters. Election laws will surely change as a result of Nix's bragging and Facebook's arrogant and inept Photo: Henry nicholls response to this snowballing scandal. Nobody could get away with such brazenly political manipulation in TV ads. Why should they do so on Facebook or any other part of the web? Cambridge Analytica also says their data "informed all the strategy" of the Trump campaign, including use of the "Crooked Hillary" slur that Trump still deploys to this day. At this point, lots of Trump supporters - and many political pundits - like to say that nobody could be this powerful. No single firm could have exerted this much influence. But that ignores the simple premise that has taken Facebook to such epic heights until now: that we trust our friends as a source of information far more than we have trusted traditional media and other institutions. The Trump campaign - aided and abetted by Russian hackers and trolls, conservative billionaires, and the brainiacs of firms like Cambridge Analytica - drove its disinformation through the people we like to trust: our friends. The evil geniuses of Cambridge Analytica were, as Channel 4 has shown, not nearly the geniuses they thought they were. Seriously, guys: when your company is registered in Delaware, you should probably realize that you come under US jurisdiction. Besides, we now know that many firms hoovered up Facebook's data and the social media giant didn't care. The end is surely nigh for Cambridge Analytica, and its key executives and investors can expect subpoenas in the near future. If the Democrats win back the House this year, we can expect new laws to prevent unattributable, untrackable political ads on digital platforms in time for the election that will decide Trump's fate. But before we reach that point, Facebook's future is already in serious doubt. It is now a polluted space, where you have no idea if your friends are real, if their posts are disinformation, if the ads are legal, and if your user data is safe. You may still trust your friends, but you won't trust what they post on Facebook. Advertising dollars will bleed away, removing the only thing Facebook really cares about. Developers will drift away because they won't want to work for a polluted brand. And the regulators will start interfering with new product launches and new takeover targets. If that sounds ridiculous, cast your mind back to the almighty position of Microsoft almost two decades ago, when it ruled most of the computer screens, documents and emails we stared at all day. When the justice department challenged its monopoly power, Bill Gates, his executives and his lawyers dug in with every denial and shred of outrage they could muster. Take the plunge but what then? Photo: getty A guide to life after Facebook TeCHnology DeSk For many people, deleting their Facebook accounts sounds a lot like living a carbonneutral life, recycling all your waste or going hardcore vegan: a nice idea, and probably the morally right thing to do, but way too much of a hassle to actually go through with. Facebook, after all, is how millions of people keep in touch with loved ones, plan weekends and evenings, and engage with likeminded communities. And that's without touching on the company's other services, Instagram and WhatsApp, which between them form a trifecta of seeming indispensability. But I'm here to tell you it can be done - I deleted my Facebook account in 2015, and haven't looked back. In the first few weeks after deleting your account, it can be tempting to try and replace every single element of Facebook with a competing service in order to satisfy your idle thumbs' desire. But before you do, consider whether you could also use this change to overhaul your relationship with your phone, social media and the internet in general. Do you really need to find an alternative website to keep up with the racist tirades of that one guy you went to school with, or the bitcoin pyramid scheme your brother-in-law has been promoting? Couldn't you just … not? For most people, if they are honest with themselves, Facebook comes down to three things: pictures, messaging and events. For messaging, you have got a sliding scale of options, all perfectly decent and, frankly, mostly better than Facebook Messenger itself. If you don't really care too much about leaving Facebook Inc, and just want to get off Facebook.com, then WhatsApp remains a surprisingly effective alternative. Yes, the service is owned by Facebook, but due to its end-to-end encryption, the company can never access any of your conversations - a far cry from Facebook Messenger itself, which is religiously indexed, catalogued and analysed to better sell you things. Alternatively, try Signal, a free messaging client on which WhatsApp's encryption is based. No one harvests your data, it uses phone numbers rather than user accounts, and it's free and easy to set up. Paperless Post offers an email-based alternative to the typical Facebook event if you're trying to do something small-scale and fairly private. Simply add people by their email addresses, get them to RSVP yes or no, and away you go. The service can add to calendars, manage updates to times and locations, and looks fairly classy to boot. If you're doing something bigger, Eventbrite is free for non-paid events, and while it charges a small fee to sell tickets, it also handles the billing and admin for you. I am not going to lie to you: this is where it gets tricky. Facebook is the largest photo-sharing site on the internet; Instagram, the No 2, is also owned by Facebook. Google Photos is a fantastic service, but if anything even more data-scrapy than Facebook. Snapchat … probably isn't what you're looking for. Apple's iCloud Photo Storage doesn't really work very well, is quite expensive and also only works on iDevices. If you really want to upload pictures to the internet for public consumption, likes and shares, then your best bets are probably social networks such as Twitter or Tumblr. Alternatively, if you want to share bundles of photos with friends and family, you can email or message them instead. Concerns are mounting about how the cars behave in dense urban environments. Photo: Alamy What drawbacks does the Self-driving car have? SAm levIn A few days ago a self-driving car by Uber hit a pedestrian and killed her immediately. Following that, Uber has admitted that there is a "problem" with the way autonomous vehicles cross bike lanes, raising serious questions about the safety of cyclists days after the company announced it would openly defy California regulators over self-driving vehicles. An Uber spokeswoman said on Monday that engineers were working to fix a flaw in the programming that advocates feared could have deadly consequences for cyclists. Uber began piloting its self-driving vehicles in its home town of San Francisco last week, despite state officials' declaration that the ride-share company needed special permits to test its technology. On day one, numerous autonomous vehicles - which have a driver in the front seat who can take control - were caught running red lights and committing a range of traffic violations. Despite threats of legal action from the department of motor vehicles (DMV) and California's attorney general, Kamala Harris, Uber refused to back down on Friday, claiming its rejection of government authority was "an important issue of principle". Concerns are mounting about how the cars behave in dense urban environments, particularly in San Francisco, where there are an estimated 82,000 bike trips each day across more than 200 miles of cycling lanes. The San Francisco Bicycle Coalition has released a warning about Uber's cars based on staff members' firsthand experiences in the vehicles. When the car was in "self-driving" mode, the coalition's executive director, who tested the car two days before the launch, observed it twice making an "unsafe right-hook-style turn through a bike lane". That means the car crossed the bike path at the last minute in a manner that posed a direct threat to cyclists. The maneuver also appears to violate state law, which mandates that a right-turning car merge into the bike lane before making the turn to avoid a crash with a cyclist who is continuing forward. "It's one of the biggest causes of collisions," said coalition spokesman Chris Cassidy, noting that the group warned Uber of the problem. Company officials told the coalition that Uber was working on the issue but failed to mention that the self-driving program would begin two days later without permits, he said. "The fact that they know there's a dangerous flaw in the technology and persisted in a surprise launch," he said, "shows a reckless disregard for the safety of people in our streets." Uber spokeswoman Chelsea Kohler told the Guardian in an email that "engineers are continuing to work on the problem", and said that the company has instructed drivers to take control when approaching right turns on a street with a bike lane. She did not respond to questions about how the cars, Volvo XC90s, detect cyclists and what kind of training and testing the firm conducted before implementation. Linda Bailey, executive director of the National Association of City Transportation Officials, which has raised formal objections to partially automated vehicles, said research raises serious alarms about the ability of drivers to properly intervene in semi-autonomous cars. "It's very clear that people are not good at paying attention," she said, adding, "We're waiting for enough people to die for something to happen. It's not a great way to make policy." Is Spotify really worth $20bn? Alex Hern When Spotify lists on the New York Stock Exchange in the coming weeks the loss-making music streaming service is likely to be valued at more than $20bn (£15bn): such is the faith of investors in its charismatic Swedish founder, Daniel Ek. Ek, they believe, can build Europe's answer to Netflix - a global cultural behemoth that can take on industry incumbents and the big four technology companies at the same time, and come out on top. If Netflix can overturn Hollywood, then Spotify can transform the music industry. At least that is the hope among US fund managers. Only 10 years after it was founded, Spotify is a force to be reckoned with. It has 159 million active users, with 71 million paying monthly subscriptions. The rest are part of Spotify's "freemium" service and have to listen to ads to get their music free. Annual revenue last year was nearly $5bn. Apple Music, by contrast, has 36 million subscribers. In a letter posted alongside Spotify's pre-float filings on Wednesday, Ek said the company hoped to "democratise" the music industry. Spotify, he wrote, could "connect all of us, across the world, in a shared culture that expands our horizons". Lofty aims, couched in the aspirational terms that those in Silicon Valley like to espouse. But there are reasons to doubt Spotify can pull off the same level of success as Netflix. Music is a very different industry to film and television, and the competitive landscape it finds itself in brings challenges that Netflix has never had to face. The industry has never regained the profitability it enjoyed before the likes of Napster ripped up its business model. Spotify lost $1.5bn last year, up from losses of $650m the year before. Its relationship with the music industry incumbents- that is, the companies that produce the records - is one major obstacle. The company has to license its library through the same bottleneck of major labels as any other player in the streaming world, and for the time being the labels still hold all the cards. Its losses are down to it paying more in licensing than it can afford - even as the amount that trickles down to many artists is less than they can survive on. The company has paid out some $10bn in royalties to artists, music labels, and publishers so far, according to the financial services company Hargreaves Lansdown, and it is obliged to pay at least $2bn in further royalty payments over the next three years. "Just four music companies control the rights to 87% of the music streamed on Spotify," says the Hargreaves analyst Laith Khalaf, "which gives them a healthy bargaining position when it comes to getting their pound of flesh from Spotify's revenues." But Pär-Jörgen Pärson, an early investor in Spotify, reckons the power dynamic is shifting, and there is reason to believe the terms of contracts will become less onerous. Pärson, a partner at the Swedish venture capital company Northzone, argues that the licensing agreements signed to date "were very much slanted to the owners, and the cost of growth fell to Spotify to finance". Now, he says, "it's the streaming services that hold the key to making or breaking artists, and also to the kind of underlying support an artist needs in order to build their careers and their creative work. That was historically the role of the labels but they have increasingly failed at delivering." Even if Spotify can negotiate down its royalties, however, it will still face a hard time divorcing itself from the major labels - in sharp contrast to Netflix, which has reduced its reliance on Hollywood content by producing its own hits. Netflix has been focusing on in-house productions, promising more than 800 new shows over the coming year as part of an $8bn spending spree. But music fans value a complete library that spans every label and genre. Then there is the competition. Three of the big four technology companies, Apple, Google and Amazon, have their own direct competitors to Spotify. Of those, Apple Music is by far the most successful, offering an equivalent service for an equivalent price - but one built directly into its bestselling smartphones, tablets and smartwatches. Apple Music still has fewer subscribers but it has one other major advantage: Apple does not need to turn a profit from its streaming music service, while Spotify does. Apple can leverage an operating loss on Apple Music indefinitely, to sell more iPhones and make an overall profit; Google can extend its domination of the overall market with Google Play Music All Access; and Amazon can use Amazon Irish band the Strypes perform a special set for Spotify in 2016. Photo: Alamy Music to sell more of, well, everything. "Apple are a formidable threat," agrees Pärson, but goes on: "I think that they have a product that is inferior - shown time and again whether you look at customer reviews - and their key value is that they are embedded into the phones. But we shouldn't forget that they only have a 20% market share, and Spotify is everywhere." With 46m monthly listeners, and more than 1.5bn streams of his single Shape of You, Ed Sheeran is the archetypal artist of the Spotify generation.
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Page 3: METRO SUNDAY, MARCH 25, 2018 3 Spea
Page 7 and 8: INTERNATIONAL SUnDAy, MARCH 25, 201
Page 9 and 10: SPORTS SUNDAy, MARCH 25, 2018 9 Jes
Page 11 and 12: MISCELLANEOUS SunDAY, MArCH 25, 201

25-03-2018

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