PERISCOPE

Raising the Bar Again

Could Turkey become the true victim of the twin "no" votes on the EU constitution in France and Holland? Ankara is due to start formal EU negotiations in October. But many European politicians are interpreting the referendums as a vote against further enlargement. "Turkey will take the blame for the two 'no' votes," says Daniel Hannan, a British member of the European Parliament. Last week EU Commission President Jose Manuel Barroso emphasized that negotiations would be "open ended"--in other words, not automatically leading to membership. And Enlargement Commissioner Olli Rehn said Turkey would face the "most rigorous" test of any EU candidate thus far. In practice, that surely means Ankara will be judged not just on promises of reform, but implementation. Several laws passed at Brussels' insistence--for example, freedom-of-speech reforms allowing the use of the Kurdish language in schools and in the media--are now on the statute books but are widely ignored.

European politicians who most strongly oppose Turkish accession are in the ascendant. Germany's Christian Democratic Union leader Angela Merkel has consistently called for a "privileged partnership" for Ankara short of full membership. Nicholas Sarkozy, France's Interior minister and the front runner to succeed President Jacques Chirac, last week urged that the Union's membership be limited to 27--leaving out Turkey, Croatia and other Balkan hopefuls. Talk of slowing enlargement has sown panic in Bulgaria and Romania; they're due to join in 2007 but could have their membership delayed if they fail to meet economic criteria.

Ankara, for its part, insists that it's business as usual. But resentment is growing at the EU's perceived evasiveness. Last week Deniz Baykal, leader of the main opposition Republican People's Party, for the first time denounced Turkey's path to the EU as a "dead end" and said that "full membership will never happen." Opinion polls show that many Turks agree--while more than 80 percent are in favor of joining the EU, just 3 percent think that the EU is "fully sincere in its dealings with Turkey." The other 97 percent are far more suspicious--and increasingly, it's hard to blame them.

THE TWO SIDES TO INSTABILITY EDITION

Turmoil in democratic India and Kyrgyzstan is unwelcome. But in autocratic Yemen and Russia, it just might be a sign of changes to come. India Privatization plans anger leftists, threaten coalition split. Congress will give a little--a breakup would open the door to the common enemy, the BJP.

Kyrgyzstan Bakaiyev looks set to take July 10 vote. But infighting over power and ousted prez Akayev's business assets will follow. Democracy is messy.

Russia Government now controls gas giant Gazprom, but surprisingly didn't merge it with state oil firm Rosneft. Expect the rivals still to compete fiercely.

Yemen Country is racked by Shiite unrest, terrorism and revolts over fuel-subsidy cuts. Military crackdown--or even regime collapse--is looking ever more likely.

INDONESIA

A New Generation

Indonesia has never quite been the poster child for democracy. But in recent years the country has taken steps in the right direction, including most recently the first-ever direct elections of mayors, district chiefs and provincial governors, which have been taking place over the past three weeks. Optimists are hailing them as a chance to cultivate a new generation of ethical leaders at the grass-roots level. "It's not going to turn [things around] overnight," says Joel S. Hellman, chief governance adviser for the World Bank in Jakarta, "but it's certainly the most important step they can take, and it's long overdue."

Foreign donors--who have been offering technical assistance and money to select local leaders--have a huge stake in the process. The World Bank, for example, is spending around $200 million trying to institute transparent, clean-government programs at the local level; in the past two years the bank has spent about $40 million. Will the investment pay off? More than 50 races were held last week, and although the results are not yet finalized, in some places the outcomes look favorable. West Sumatra Province District Chief Gamawan Fauzi, for example, credits his World Bank-inspired anti-corruption plat-form for his lead in a five-person race for governor. "Despite resistance from vested interests, I'm trying to create integrity, honesty and self-dignity in this province," he told NEWSWEEK. "It's not easy." It never will be. But he's got the right idea.

Books: Time for a Tome?

Bill Clinton offered an exhaustive look at his life. George H.W. Bush co-wrote a foreign-policy tome with his national-security adviser. Now George W. Bush is mulling his own book, according to one senior aide and one former administration official (both declined to be named about a subject that the White House has not discussed in public). Nothing is on paper, and Bush has yet to decide who will physically write his book, but he has discussed his ideas with a handful of aides in casual conversations over the past few years. It remains unclear whether the book will stretch beyond Bush's presidency to encompass his life story.

Presidential biographies and autobiographies are big business. But in order to command a large advance, President Bush--who is famously averse to second-guessing himself--would have to show publishers a willingness to be candid about his time in office, according to one publishing source, who did not want to be named for fear of being excluded from the selling process. Bush will also need some raw materials. His father wrote letters and kept a diary; Clinton taped conversations about his life with former speechwriter Ted Widmer. But President Bush does not write e-mail, unlike his father and brother Jeb. He scribbles thank-you notes and greeting cards with a black Sharpie marker, but that's a long way from making a historic--and best-selling--tome.

Freedom Tower, Take 2

The new design for the Freedom Tower at Ground Zero is less vulnerable to a bomb blast--the first 60 meters of the tower will be windowless concrete. But esthetes, fear not: the architects propose to wrap the base in a shimmery skin of metal panels with varying textures.

The glass tower above that, with gradually sheared corners, will narrow as it rises 70 more stories. Talk about reaching new heights in design.

M&A Tale of Two Deals The urge to merge has gripped so many Taiwanese electronics manufacturers, "it's like a disease," says Y. D. Gordon, manager of THT Research, a Chicago consulting firm. Big mergers are always a dangerous bet, but Taiwanese companies are flush with cash and can't afford to stand still. Many have cut costs to rock bottom by moving production to China. Yet they still see profit margins under pressure, and are seeking relief in two opposite kinds of deals, says analyst Steven Tseng at Yuanta Core Pacific Securities in Taipei: moving up the supply chain by buying companies that supply their components, or downstream into designing and marketing their own gadgets.

Which approach will pay off? Hon Hai, a contract manufacturing giant that makes computers for HP and game consoles for Sony, is taking the upstream route. It has been gobbling up smaller firms and factories from Mexico to Finland, including the Finnish mobile-phone casing-maker Eimo Oyj. Some investors see this approach as a smart way to build a "one-stop shop" for contract customers, a class that includes major brands from Dell to Samsung. Hon Hai chairman Terry Gou says that Taiwanese companies should focus on this traditional strength--behind-the-scenes contract manufacturing at massive volumes and bargain-basement prices--because it's simply too hard to build global brands.

But that's exactly what several others are trying to do. BenQ, another big contract manufacturer, recently inked a deal to take over the Siemens mobile-phone unit as a way to raise its brand profile, a move that puts the company into competition with big contract customers like Nokia. Asustek, too, is stepping up the marketing of its own multimedia phones and laptops, and plans to create an acquisitions war chest.

Investment banks have come down on both sides of this debate. The one thing most agree on is that Taiwan's deals look better than a recent flurry out of China, all focused on building global brands. For example, Lenovo of China recently paid dearly for IBM's long-dead PC business, whereas Siemens is offering to pay BenQ to take over a mobile-phone line that is struggling, but still has valuable technology. Perhaps as long as the Taiwanese don't overpay, they can win with either strategy.

COMICS

Converting the Kids

Spider-man is about to look years younger. Until now, the Peter Parker series was targeted at teen and adult readers. But Marvel recently debuted its first line for the 10-and-under crowd. Spidey and the Fantastic Four will star in less violent story lines with panels that move in a gridlike pattern, instead of at angles, so they're easier to read. Parker (the boy behind the suit) also looks like he stepped out of a cartoon, the result of Marvel focus grouping, says supervising editor MacKenzie Cadenhead. "There's a more vibrant style. Kids will respond to that."

Marvel wants the series to convert younger readers into comic fans for life. The new line isn't wholly sanitized--Spidey's Uncle Ben still dies--and stories aren't sagas: each issue is self-contained, so there are no "to be continued" plot twists. Editor in chief Joe Quesada has "high hopes" that the X-Men and Captain America will follow. If so, a battle may play out off the pages: DC Comics already devotes about 10 percent of its issues to kids. Publisher Paul Levitz says the books teach vocabulary. Just one problem: parents are desperate for back issues--and not for collecting. Their kids' favorite paperbacks can fall apart.

FILM

Of Love And War

A tale of two soul sisters who grew up in a Tamil home in Sri Lanka comes to life in "No More Tears Sister," a new documentary from filmmaker Helen Klodawsky. Fifteen years after her younger sister--Dr. Rajani Thiranagama--was assassinated at the age of 35, allegedly by Tamil Tigers, the other, Nirmala, has broken her tormented silence. When she returned home from a U.S. college, politicized by the anti-Vietnam movement, she found an equally radicalized Rajani challenging their island nation's punishing ethnic divisions. To the consternation of their middle-class Christian parents, both women married revolutionary men. Their family lives were predictably stormy: Rajani's separation from her Singhalese husband and children posed challenges, as did his stays in safe houses. With stunning visuals, admirable emotional restraint and poetic use of Rajani's personal letters (the film is narrated by Michael Ondaatje), Klodawsky recaptures one family's sad saga all the way to their exile. It is one that will resonate with women and men in war-torn societies everywhere.

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