Wednesday, 30 June 2010


Asia Times 

Taiwan seals trade hug with mainland

Olivia Chung

Asia Times, July 1, 2010

A trade pact signed on Tuesday between mainland China and Taiwan has brought the economies of the political rivals to their closest in the six decades since they split amid civil war.

The Economic Cooperation Framework Agreement (ECFA) includes an "early harvest" list of goods and services, with 539 Taiwanese products, worth US$13.8 billion or 16% of Taiwan’s exports to China last year, likely to receive zero tariff rates in the mainland within the next two years. In the other direction, 267 mainland products, worth $2.86 billion or about 10.5% of mainland exports to Taiwan, receiving the same treatment across the Taiwan Strait.

(…) [artículo aquí]

Tuesday, 29 June 2010

Book Excerpts

Rob Salkowitz

Forbes, June 29, 2010

"How can you write about the future of emerging economies without talking about China?" asked one of my reviewers. I was sending around an early draft of the manuscript for my new book, Young World Rising. After all, the reviewer reasoned, everyone knows that China and India are the conjoined siblings of the developing world: two giants pursuing contrasting strategies to lift their billions out of poverty. And they're a partner act. Splitting them up would be like booking Abbot without Costello.

In Young World Rising, I look at development through the lens of demographics: particularly, the unique relationship between youth, technology adoption and willingness to take entrepreneurial risk. In a global economy based on knowledge, innovation and the ability to adapt quickly to new conditions, countries with a young center of gravity to their workforce will enjoy a significant competitive advantage as the old centers of the 20th century economy get grayer, slower and more conservative in their outlook toward risk and change.

Demographically, India and China are starting from a comparable place, but moving in opposite directions. In my view, this has profound consequences for their future development in a global knowledge economy fueled by entrepreneurship and bottom-up innovation. Both China and India have populations in excess of 1 billion and are experiencing rapid, if uneven, economic growth. Today, both are relatively young. China's median age is around 34, India's about 26. (By comparison, the U.S. median age is 36.7).

(...) [artículo aquí]

Monday, 28 June 2010


Bloomberg News, June 28, 2010

China’s efforts to contain the risks from a surge in local-government debt may hurt growth in the world’s third-biggest economy, investment bank China International Capital Corp. said.

A report by the chief auditor last week indicated officials may take “relatively forceful measures” including strictly controlling new borrowing, CICC economists led by Hong Kong- based Ha Jiming said in a report today. The effect may be to “limit the source of funding for infrastructure projects and affect future economic growth.”

Chinese policy makers are grappling with the risks posed by the credit boom that fueled the nation’s comeback from the global recession. Fitch Ratings says lenders’ weakened financial positions as asset quality deteriorates could limit the nation’s ability to respond to any renewed global slump with more stimulus measures.

(...) [artículo aquí]

Sunday, 27 June 2010


The Economic Times, June 27, 2010

NEW DELHI: Bolstered by rapid growth and increasing domestic consumption, developing nations -- including India -- will account for 60 per cent of t he global output by 2030, the OECD has said.

A grouping of mostly developed nations, the Organisation for Economic Cooperation and Development (OECD) said that the rapid growth of emerging nations has resulted in a global economic power shift.

"The global GDP growth over the last decade owes more to the developing world than high-income economies. If this trend continues, developing countries will account for nearly 60 per cent of the world GDP on a purchasing-power parity by 2030," OECD secretary-general Angel Gurria said.

According to the 31-nation grouping, the power shift towards developing nations has been accelerated by the financial meltdown. OECD nations, including the US, France and Germany, currently make up for more than 60 per cent of the world economy.

Gurria pointed out that while high-income countries were languishing in the worst recession since the 1930s, China and India continued to power ahead.

"This is not a single standalone event, but the sign of an important structural transformation in the global economy..." Gurria noted in a statement on Friday, ahead of the G-20 Summit in Toronto, Canada.

(...) [artículo aquí]

Saturday, 26 June 2010

North Korea will hold only the third-ever meeting of its ruling party in September, the clearest sign yet that the hermit nation is preparing for a transfer of power.

David Eimer

The Telegraph, June 26, 2010

Saturday's announcement that the Political Bureau of the Workers' Party of Korea (WPK) would gather to elect a new leadership follows an intense period of political jockeying in the secretive state. Ailing leader Kim Jong-il is desperate to ensure that his son Kim Jong-un is anointed as his successor.

It was at the last meeting of the WPK in 1980 that Kim Jong-il was made his father's official successor, when he was elected as a standing member of the Political Bureau. Analysts in South Korea are speculating that the September session will result in Kim Jong-un being elevated in the party hierarchy.

"There is a great possibility that Kim Jong-un will be assigned to a high-ranked position in the Political Bureau during the convention," said Koh Yu-hwan, an expert on North Korea at Seoul's Dongguk University.

(...) [artículo aquí]

Friday, 25 June 2010


Michael A Innes

Asia Times, June 25, 2010

The North Atlantic Treaty Organization's International Security Assistance Force (ISAF) launched Operation Moshtarak in the Nad Ali and Lashkar Gah districts of Afghanistan's Helmand province in mid-February.

The intent was to wrest it from Taliban control and create a "bubble of security" for local governance, described in an ISAF press release as "an Afghan-led initiative to assert government authority in the center of Helmand province". [1] The operation involved the deployment of 15,000 allied and Afghan troops, among them American, British, Danish, Estonian and Canadian elements from ISAF's Regional Command South, as well as five brigades of Afghan forces drawn from the Afghan National Army, the Afghan National Police, Afghan Border Police and the Afghan gendarmerie.

Operation Moshtarak was meant to demonstrate several things. Its first priority was to restore Afghanistan's ability to govern an area that had long functioned as a hub of Taliban and narcotics trafficking activity - a "bleeding ulcer", as then-ISAF commander General Stanley McChrystal recently called it.

(...) [artículo aquí]

Thursday, 24 June 2010


T. T. Ram Mohan

The Economic Times, June 24, 2010

The Indian economy grew at an average of 9% in 2004-08 . This burst of growth surprised people since it had not been immediately preceded by any burst of ‘reforms’. Some commentators now think that this burst is a something of fluke linked to the global economic bubble. The global bubble burst following the sub-prime crisis. So, these commentators believe that a return to the 9% trajectory is unlikely in the near future.

They are likely to be proved wrong — and sooner than thought earlier. Until recently, it appeared that the Indian economy would grow at 8-8.5% in 2010-11. Only in 2011-12 would growth touch 9%. On present showing, there is every prospect of the Indian economy growing at 9% in 2010-11 itself.

This optimism is based on the latest figures for growth in the recent past. In 2009-10, the Indian economy grew at 7.4% even as the world economy struggled to come out of the worst financial crisis in a century. Not many had expected such a strong recovery following the fall in the growth rate to 6.7% in 2008-09. The recovery in 2009-10 was strong despite agriculture doing badly on account of drought. Agriculture grew only by 0.2%.

What conclusions can we draw from the recent growth experience? The first and, perhaps, most important conclusion is that growth of close to 9% in 2004-08 was not entirely the outcome of the global boom and cannot be construed as something of a bubble. If that were the case, the deceleration in growth rate in the Indian economy in 2009 and 2010 should have been as sharp as that of the global economy and the subsequent recovery as slow. Neither has happened.

(...) [artículo aquí]

Wednesday, 23 June 2010


Arvind Panagariya

The Economic Times, June 23, 2010

Following the conclusion of the first India-US strategic dialogue , commentators in the Indian press have nearly uniformly expressed frustration with the lack of action under the Obama administration . To judge whether this dissatisfaction is grounded in reality, we must first ask whether each country has enough reason to invest in a close relationship with the other in the first place.

From the Indian perspective, there seem to be sufficient reasons for an affirmative answer. Accounting for almost a quarter of the world's GDP, the United States is by far the largest economy in the world. It is also the only super power on the globe and likely to remain so in the foreseeable future. It is a democracy that values other democracies. And, finally, it is by far the largest single recipient of India exports of goods and services. If we seek rising economic prosperity and increasing voice in the world affairs, America is a good bet.

An affirmative answer seems less clear-cut from the US perspective, at least on the surface. True, India is by far the world's largest democracy. But this cannot be a game changer by itself since it has been true for the last 60 years. At $1.25 trillion, Indian economy is just a little more than 2% of the world economy . Globally, it ranks a low 11th in terms of the economic size, ranking behind China and Brazil. Above all, India accounts for less than 2% of the US exports and imports.

Seen in this context, the puzzle is not why the Obama administration is not doing more to promote ties with India but how India has come to command so much attention on the global stage. The main explanation of this puzzle lies in where the United States sees India going in the next 15 to 20 years.

(...) [artículo aquí]

Tuesday, 22 June 2010


2point6billion, June 22, 2010

After gaining serious ground in 2009, a recent report says China may supersede the United States as the world’s preeminent manufacturer as early as next year, forcing the United States to relinquish a title its held for over a century.

Analysis undertaken by U.S.-based IHS Global Insight estimated the value of China’s manufacturing sector at US$1.6 trillion for 2009 in real U.S. dollar terms, almost US$1 trillion ahead of Japan in third place with US$795 billion and just US$110 billion behind the United States, whose sector ranked first in the study with a value of US$1.71 trillion.

Mark Killion, managing director at IHS Global Insight, believes it is more than likely that China will surpass the United States by 2011, but didn’t rule out a shift in the rankings this year, saying it would be a “close call.”

(...) [artículo aquí]

Monday, 21 June 2010


Bloomberg News, June 21, 2010

Chinese President Hu Jintao may have succeeded in removing the yuan’s valuation from debate at this week’s Group of 20 leaders’ summit, economists and political analysts say. How much time he’s bought depends on how flexible the currency will become.

Days before China’s central bank announced on June 19 that the yuan’s “flexibility” would increase, officials said the currency’s value was not a suitable item for discussion at the G-20 meeting in Toronto. Hu will meet with President Barack Obama and other world leaders at the June 26-27 summit to discuss items ranging from the global response to the European sovereign-debt crisis to increasing the influence of developing countries in the International Monetary Fund.

U.S. lawmakers threatened to thwart China’s wish to keep the yuan off the meeting’s agenda. House Ways & Means Chairman Sander Levin, a Michigan Democrat, said on June 16 that China needed to act by the end of the summit or risk U.S. legislation which could levy penalties on Chinese imports.

(...) [artículo aquí]

Sunday, 20 June 2010


Bernardo M. Villegas

Manila Bulletin, June 20, 2010

That Asia is the new economic epicenter has already become a cliché. Dynamic growth is without doubt shifting from the Atlantic to the Pacific. This transition can be attributed mainly to the two economic superpowers of Asia, China and India. A number of economists project that China will surpass the US, and India will become the third largest economy in the next few decades. Goldman Sachs' Jim O'Neill, who coined the acronym BRIC (Brazil, Russia, India and China), is forecasting that China is likely to overtake the US by 2027, while PriceWaterhouseCoopers projected that this could happen as early as 2020. Nobel Prize winning economist Robert Fogel surmises that the Chinese GDP could reach $123 trillion in 2040. The main driving force for this extraordinary growth will be the increased productivity of the 700 million rural Chinese who will be the main beneficiaries of the enormous investments that the Chinese Government is making in education.

The Great Recession could have been providential for Asia. It is entering the new decade 2010-2019 amid great optimism. Many Asian economies, led by China, are expected to catch up fast with their more advanced colleagues from the OECD countries. China will surely overtake Japan as the world's second largest economy sometime this year 2010. With a strong rebound in its exports, China has already overtaken Germany as the world's largest exporter. It has also ended the US supremacy in the global automotive market. All these have happened at the dawn of the new decade, as the Great Recession struck at full force.

(...) [artículo aquí]

Saturday, 19 June 2010


Sultan M Hali

Pakistan Observer, June 19, 2010

Kyrgyzstan is a landlocked country in Central Asia, bordering Kazakhstan, China, Tajikistan and Uzbekistan. The mountainous region of the Tian Shan covers over 80% of the country; Kyrgyzstan is occasionally referred to as “the Switzerland of Central Asia”, as a result, with the remainder made up of valleys and basins. Bishkek in the north is the capital and largest city, with approximately 900,000 inhabitants. The second city is the ancient town of Osh, located in the Fergana Valley near the border with Uzbekistan, which is the location of the current rioting. The nation’s largest ethnic group is the Kyrgyz, a Turkic people, who comprise 69% of the population. Other ethnic groups include Russians (9.0%) concentrated in the north and Uzbeks (14.5%) living in the south. Small but noticeable minorities include Tartars (1.9%), Uyghurs (1.1%), Tajiks (1.1%), Kazakhs (0.7%), and Ukrainians (0.5%), and other smaller ethnic minorities (1.7%). The population of Kyrgyzstan is 80% Muslim, 17% Russian Orthodox and 3% other. During Soviet times, state atheism was encouraged. Today, however, Kyrgyzstan is a secular state, although Islam has exerted a growing influence in politics.

(...) [artículo aquí]

Friday, 18 June 2010


BEIJING, June 18, 2010 – China's economy has continued to grow robustly, with some softening recently, according to the World Bank’s latest China Quarterly Update released today.

The Update, a regular assessment of China’s economy, finds that so far in 2010 the slowdown in government-led investment (GLI) after last year’s massive stimulus has partly been offset by strong real estate investment. Household consumption growth has held up well, reflecting a favorable labor market. Leading indicators and industrial production data suggest some moderation of the pace of growth in the second quarter, although that pace is still rapid.

Export volumes have recovered rapidly since the trough in early 2009. Nevertheless, China’s trade surplus has declined further due to surging import volumes and declining terms of trade. Inflation has picked up somewhat, but core inflation remains low. However, soaring property prices triggered tough property-specific measures, including tightening access to mortgage financing.

(...) [artículo aquí]

[China Quarterly Update, June 2010]

Thursday, 17 June 2010


The Mainichi Daily News, June 17, 2010

The Democratic Party of Japan (DPJ) has pledged to push forward discussions on a consumption tax hike in its campaign manifesto for this summer's House of Councillors election.

In its latest manifesto, the DPJ will include a consumption tax increase, stating, "In order to reach an early conclusion, we will promote a cross-party discussion on fundamental reform of the tax system including the consumption tax."

In its draft manifesto, the DPJ had stated it would start talks on taxation reform "after the next House of Representatives election." However, the proposed timeline has been revised to accelerate the discussion, with Prime Minister Naoto Kan insisting on an early agreement on the matter and stressing his intention to begin cross-party discussions after the Upper House election.

(...) [artículo aquí]

Wednesday, 16 June 2010


Michael Gerson

The Washington Post, June 16, 2010

In past elections for North Korea's parliament, the Supreme People's Assembly, authorities have reported 100 percent voter participation and a 100 percent approval rate for all the candidates. During the last election, however, the government admitted a 99.98 percent voter turnout -- though public approval held steady at 100 percent. Such are the increments of North Korean concessions to reality.

The regime's constitution is deception. Everything, starting with the birthplace of its leader, is a lie. In more than 60 years, North Korea has never published an honest or complete set of economic indicators. Its history books simply make up events -- Americans who harvest organs of Koreans in hospital basements or missionaries who crucify Korean children.

So it is not easy to part the curtain on the regime's internal dynamics. But South Korean academics and government officials report recent glimpses. After much delay, Kim Jong Il's third son, Kim Jong Eun -- reputed to be a carbon copy of his father -- has been chosen as successor. The crown prince is young (27) and inexperienced, which seems to be the point. Kim Jong Il's brother-in-law has been appointed a kind of guardian or prince regent. In the event of Kim Jong Il's death, North Korea's old guard -- a few dozen faceless bureaucrats and generals in their 70s and 80s -- would remain in control.

(...) [artículo aquí]

Tuesday, 15 June 2010


Times Online and Tony Halpin

The Times, June 15, 2010

Uzbekistan last night closed its borders to refugees fleeing neighbouring Kyrgyzstan as the numbers killed in the ethnic violence spiralled and aid agencies reported fresh allegations of atrocities from the survivors.

With over 100,000 refugees pouring into Uzbekistan, Central Asian state’s Deputy Prime Minister Abdullah Aripov said the border would be shut, despite pleas from aid groups and the UN to leave it open.

“Today we will stop accepting refugees from the Kyrgyz side because we have no place to accommodate them and no capacity to cope with them,” he said.

Uzbekistan needed international humanitarian aid to cope, he said.

“If we have the ability to help them and to treat them of course we will open the border” again, he added.

Mr Aripov said Uzbekistan had registered 45,000 adults from Kyrgyzstan, while another official said there were 65,000 adults in Uzbekistan’s Andijan region alone. The UN’s refugee agency said it was sending aid for 75,000.

(...) [artículo aquí]

Monday, 14 June 2010


Philip P. Pan

The Washington Post, June 14, 2010

MOSCOW -- Deadly riots spread across southern Kyrgyzstan on Sunday as police with shoot-to-kill orders failed to stop the nation's worst ethnic violence in two decades and aid agencies reported that as many as 80,000 people had fled across the border to Uzbekistan.

With scores killed and hundreds injured as Kyrgyz mobs rampaged through ethnic Uzbek villages, human rights groups urged the international community to intervene and prevent a humanitarian disaster. But neither Russia nor the United States, both of which have military bases in the impoverished Central Asian country, appeared willing to dispatch peacekeeping troops.

A senior Obama administration official, speaking on the condition of anonymity, said Washington was in "extremely close communication with the Russians" and trying to coordinate a response through the United Nations or another international institution. But he said it was too early to speculate about military intervention.

(...) [artículo aquí]

Sunday, 13 June 2010

La economía del país asiático crecerá un 8% este año gracias al repunte de la producción industrial

Fernando Cano

El País (Negocios), 13 de junio de 2010

India no se ha dormido. Durante los últimos meses de crisis económica ha aguantado el temporal a base de ayudas estatales y de un fuerte tejido empresarial interno. A pesar de que este año fiscal 2008-2009 el país vio crecer su PIB solo en un 6,5%, el peor dato en seis años para el tigre asiático, esta cifra supera largamente la caída del 4,2% que registró la Unión Europea y el retroceso del 2,5% de EE UU durante 2009. Estos datos se han mantenido en el curso 2009-2010, con un alza del PIB del 7,4% y ya hay previsiones que sitúan el crecimiento para 2011 en el 8%.

La clave de este constante desarrollo ha sido el sector manufacturero, que creció un 10,8% en los últimos 12 meses, lo que sumado a la construcción, las infraestructuras energéticas, los transportes y las comunicaciones ha articulado el repunte de las estructuras productivas indias. Este alza ha compensado en parte el menor crecimiento del sector agrícola -castigado por las recientes condiciones climatológicas-, que por sí solo representa el 20% del PIB y emplea a dos tercios de la fuerza laboral local.

No obstante, India mantiene una serie de deficiencias que le impiden equipararse a los países ricos. En primer lugar se encuentran sus elevados niveles de pobreza, que se mantienen en torno al 25% de la población, una cifra que, según el propio Gobierno, no se podrá reducir a menos que el país retome ritmos de crecimiento del 10%. Estos niveles de pobreza también repercuten en una clase media con bajos ingresos que hace poco atractivo el desarrollo de negocios extranjeros para cubrir la demanda del mercado local.

(...) [artículo aquí]

Saturday, 12 June 2010


Philip P. Pan

The Washington Post, June 12, 2010

MOSCOW -- The leader of Kyrgyzstan's fragile interim government urged Russia to send peace-keeping troops Saturday to quell ethnic violence that has left scores dead and prompted a panicked exodus from the former Soviet republic, which hosts a key U.S. air base.

But the Kremlin said the situation did not yet call for military intervention and pledged instead to send humanitarian aid and help evacuate the wounded.

Thousands of frightened ethnic Uzbeks in the nation's south were fleeing toward the Uzbekistan border as President Roza Otunbayeva acknowledged her government had lost control of Osh, the country's second-largest city.

Witnesses said gangs of young Kyrgyz men armed with guns and metal bars set fire to Uzbek neighborhoods on the second day of clashes that have killed at least 65 people and injured nearly 900 others, many suffering from gunshot wounds.

Local media broadcasted images of Uzbek families streaming from burning villages and gathering near the border, which Kyrgyz authorities said Uzbekistan was attempting to seal off. The Associated Press reported that children had been killed in stampedes.

(...) [artículo aquí]

Friday, 11 June 2010


ChinaRealTime Report, June 11, 2010

Analysts react to China’s major economic indicators for May, which showed consumer-price inflation breaching the 3% level for the first time in more than a year and a half.

– Slowing growth and rising inflation – which is what the May data shows – is a policy puzzle for the government…Falling growth argues for policy continuity. Rising inflation suggests accelerating the tightening schedule. We think government will be more focused on risks to the growth outlook than the current, rather mild, inflationary pressures. The extent of the impact of the current sovereign debt crisis in Europe, and the policy controls on the domestic real estate sector, are not yet known. The government will want to see whether the Chinese economy slips up on either of these banana skins, before accelerating the tightening schedule. – Tom Orlik, Stone & McCarthy Research Associates

– Inflation remains a risk due to the underlying strong demand. Recent industrial strikes suggest that wage hikes will spread across industrial sectors, placing pressures on firms to raise prices on their final products. Therefore, CPI inflation is far from its peak as inflationary pressures continue to mount. We believe that as China is experiencing strong demand pressures, [and] it is time for the People’s Bank of China to switch its policy priority from controlling credit to raising interest rates in order to counter the risk of run-away inflation. – Li-Gang Liu, Australia & New Zealand Banking Group

(...) [artículo aquí]

Thursday, 10 June 2010


Bloomberg, June 10, 2010

China’s exports jumped the most in six years and property prices rose at a near-record pace, signs that the economy is withstanding the sovereign-debt crisis in Europe and remains at risk of overheating.

Stocks fell, extending the Shanghai Composite Index’s 21 percent decline this year, on concern the government will step up policy tightening. The leap in exports could be a blip before European demand wanes, while falling property sales signal a looming slowdown in investment that may cool the world’s third- biggest economy, investment bank China International Capital Corp. said.

Today’s data “may be the good news before the bad news as the European debt crisis curbs the region’s demand and property- market corrections drag on investment,” said CICC’s Xing Ziqiang, a Beijing-based economist. “Exports may decelerate rapidly later this year and economic growth may slow to around 7.5 percent in the fourth quarter.”

(...) [artículo aquí]

Wednesday, 9 June 2010


Allison Jackson

AFP, June 9, 2010

BEIJING — The days of endless cheap labour in the "workshop of the world" could be numbered as a shortage of workers and government fears of social unrest drive up wages in China, experts say.

A spate of suicides at Taiwanese high-tech firm Foxconn and an unprecedented strike at Honda's auto parts factory in southern China suggest that employers can no longer take their workforces for granted after decades of rapid growth.

Beijing has reacted to the labour unrest by launching a round of minimum wage hikes across the nation, reflecting concern among top leaders that frustrated workers could trigger wider social turmoil.

Under President Hu Jintao, "the direction of policy has been towards greater concern about income distribution, less emphasis on growth at all costs", Tsinghua University economist Patrick Chovanec said.

(...) [artículo aquí]

Tuesday, 8 June 2010


Richard Lloyd Parry

The Times, June 8, 2010

North Korea’s “Dear Leader” Kim Jong Il appointed his brother-in-law as his deputy yesterday in the latest sign that he is consolidating his family’s grip on the world’s only hereditary communist dictatorship.

Chang Sung Taek was appointed vice-chairman of the National Defence Commission, the country’s most powerful state institution. Mr Chang is believed to be close to the Dear Leader’s youngest son, Kim Jong Un, who is emerging as the most likely successor to his ailing 68-year-old father.

The news was contained in an official report on the Supreme People’s Assembly (SPA), a tame parliamentary body, which announced various personnel changes including the appointment of a new premier, Choe Yong Rim. The SPA rarely meets more than once a year. This was the second session in two months, suggesting urgent business.

For the past 18 months, since Mr Kim suffered from what appeared to have been a stroke, official photographs suggested that Mr Chang had rarely been far from his side.

(...) [artículo aquí]

Monday, 7 June 2010


The India growth story is enviable. Despite plaguing problems, India has emerged stronger and resilient to the global crisis so far.

India is expected to be the world's fastest growing economy by 2018, according to Economist Intelligence Unit (EIU), the research arm of the Economist magazine.

India, the second largest growing economy will overtake China as the fastest growing major economy with an average of eight per cent in the next five years, the report stated earlier this year. China witnessed 11.9 per cent growth in the same quarter.

There is much to cheer for India's economy as it grew at its fastest pace in six months in the quarter through March 2010, propelled by government and consumer spending.

Indian economy has been one of the least affected by the global crisis. "In fact, India is one of the growth engines, along with China, in facilitating faster turnaround of the global economy. Risks, however, remain," the Economic Survey said in February this year.

(...) [artículo aquí]

Sunday, 6 June 2010


Bernardo M. Villegas

Manila Bulletin, June 6, 2010

It is very important that President-elect Noynoy Aquino is able to hit the ground running on June 30, 2010. He is fortunate that he is facing a more favorable economic environment than his two immediate predecessors in 1998 and 2001, respectively. As I correctly forecasted early this year, a GDP growth of 7.3% in the first quarter was achieved. The prospects for April to June 2010 are even brighter since these months coincided with the peak of election-related spending and the summer months.

The world is recovering from the Great Recession of the last two years. The recovery is especially robust among the emerging markets to which the Philippines belongs. In both the advanced economies and the emerging markets, economic indicators are generally improving. Countries like China, India and Indonesia with which the Philippines is increasing trade and investment relations are experiencing a V-shaped recovery, i.e. they are already growing at GDP rates that are close to or even higher than their pre-crisis levels. As reported by the Economist Intelligence Unit, China's economy expanded by almost 12% year on year in the first quarter of 2010, and Singapore's by a whopping 12%. World trade, which is recovering rapidly as GDP and manufacturing growth pick up, rose by an unprecedented 5.3% in the three months to January 2010 compared with the previous three-month period. It is no wonder that Philippine exports have expanded at 43% in the first quarter of this year.

Thanks to the ongoing global economic recovery, the new Administration can follow the double-track strategy to attaining the 7% to 9% growth in GDP that the country needs to effectively combat mass poverty, which is one of the worst in East Asia. The first track--which is a strong domestic market--is what enabled the Philippines to avoid a recession in 2009, together with its two giant neighbors, Indonesia and Vietnam. Despite exports declining by more than 30% in 2009, GDP managed to grow because of domestic consumption, fueled especially by the remittances of overseas Filipino workers and government pump priming. Growth in the first semester of 2010 can be as high as 7% because in addition to these two sources of mass purchasing power, there was the added stimulus from the billions of pesos spent by the candidates for the May 10 elections.

(...) [artículo aquí]

Saturday, 5 June 2010


Masami Ito

The Japan Times, June 5, 2010

The new administration Prime Minister Naoto Kan will form next week won't have much time to act when it comes to foreign affairs.

Japan's ties with the United States will hinge on his team's ability to follow through on the agreement recently hammered out by his predecessor, Yukio Hatoyama, to move U.S. Marine Corps Air Station Futenma farther north in Okinawa.

Kan said he intended to honor the agreement when he announced his candidacy Thursday for the Democratic Party of Japan's presidency.

"The U.S. base issue in Okinawa is an extremely difficult problem with factors such as reducing the burden of the Okinawan people and maintaining a trusting relationship between Japan and the U.S. over security issues," Kan said after keeping a prolonged silence over the issue.

"On the basis of the Japan-U.S. agreement, I think it is necessary to continue making a long, sustained effort to reduce the burden of Okinawa."

The balancing act will be easier said than done.

(...) [artículo aquí]

Friday, 4 June 2010

Fifth leader in four years voted in by ruling Democrats after Yukio Hatoyama's resignation over economy and US airbase

Justin McCurry

The Guardian, June 4, 2010

The Japanese finance minister who started his political career as a straight-talking former civic activist today became the country's fifth prime minister in less than four years.

Naoto Kan beat his only rival, the relatively unknown Shinji Tarutoko, in a vote among MPs of the ruling Democratic party. He immediately promised to "rebuild the country" as it confronts economic stagnation, mounting public debt and regional instability.

The leadership election was called after the resignation on Wednesday of Yukio Hatoyama, following his humiliating climbdown over the location of a US airbase and his failure to stamp out sleaze in his own party.

Kan, 63, vowed to rebuild Japan's battered public finances, foster growth and promote regional stability amid growing fears about Chinese military power and tensions on the Korean peninsula.

(...) [artículo aquí]

Thursday, 3 June 2010


Karen DeYoung

The Washington Post, June 3, 2010

The Obama administration is hosting a high-level dialogue this week with India, part of an ongoing effort to convince the South Asian behemoth that Washington cares about more than counterterrorism in the region and supports India's claim to global power.
External Affairs Minister S.M. Krishna will head a high-level delegation at a State Department meeting Thursday with Secretary of State Hillary Rodham Clinton, national security adviser James L. Jones and other senior officials.

The meeting follows similar "strategic dialogue" sessions with Afghanistan last month and Pakistan in March, and it will bring together Cabinet officials from across the government to meet with their counterparts. But while the Afghan war and regional security issues are on the agenda, the administration has emphasized that the meeting is more akin to the "whole of government" sessions Clinton held this spring in China and Brazil.

The White House has put considerable effort into wooing India, which it sees as a potentially major international trade and security partner. President Obama held his first state dinner for Indian Prime Minister Manmohan Singh in November and plans to visit India in the fall.

In his National Security Strategy released last week, Obama said the U.S.-India alliance will be one of the defining partnerships of the 21st century, along with U.S. ties with other "emerging powers." In a symbolic gesture not extended to Afghanistan or Pakistan, the president will go to the State Department on Thursday for a reception Clinton will host for the Indian delegation.

(...) [artículo aquí]

Tuesday, 1 June 2010


Kang Chol-hwan

The Chosun Ilbo, June 2, 2010

A group of young students ask each other on the subway, "What are we going to do if war breaks out?" Fears among South Koreans of a war with North Korea have become more palpable these days, and such sentiments are understandable in the heightened tensions on the Korean Peninsula. There are those who blame the government's hardline approach. "Things were different during the days of the Sunshine Policy," they say.

I grew up in North Korea, and based on that experience, I feel that the chances of war are actually smaller now than during the period of rapprochement. Isolated provocations by North Korea, such as the sinking of the Navy corvette Cheonan, may happen again. But the threat of an all-out war with North Korea has actually diminished. For a country to start a war, the balance of military power must be broken, allies have to support it, and the other side has to be caught off guard. Even if it has overwhelming military power, a country would be hesitant to wage war against another if the other side is well prepared.

(...) [artículo aquí]

Rate hike pressure grows with inflation nearing 10%

Kartik Goyal

Business Report, June 1, 2010

India's economic growth has accelerated, adding pressure on the central bank to raise interest rates, even as Europe's sovereign debt crunch threatens the global recovery.

Gross domestic product (GDP) rose 8.6 percent in the first quarter from a year earlier after a revised 6.5 percent gain in the previous quarter, the statistics office said yesterday. The expansion matched the median estimate in a Bloomberg survey of 22 economists.

India and China, the fastest-growing major economies, are weighing the risk of Europe's debt crisis reducing demand in the EU, which accounts for a fifth of their exports. India's room to pause on monetary tightening is limited because its benchmark inflation rate is more than triple that of China.

(...) [artículo aquí]