Pesek's View From Asia
Good morning. Here's my take on some of the stories driving the debate in politics, finance and social issues across Asia today:
As India's crisis deepens, it's time to expedite change at the central bank.
Someone has to say it: Duvvuri Subbarao should resign as Reserve Bank of India governor, effective immediately. Since officials in New Delhi don’t seem to have the stomach, Subbarao could do the gracious thing and bow out before his term ends in Sept. 4 so that successor Raghuram Rajan can get to work. India has no time to waste as the rupee hits new lows, thanks in part to Subbarao's policies. They include controls on capital flows that are scaring off foreign investors and impeding Indian businesses that want to grow overseas. Markets hope Rajan, a former International Monetary Fund chief economist who predicted the 2008 crisis, can stabilize the economy. But must we really wait three weeks? India doesn't have that kind of time.
Li Ka-shing finds the buoyant property markets that made him Asia’s richest man are cannibalizing his other interests.
The problem facing Hong Kong's tycoons isn't of the human-flesh-eating kind. But success may have begun to stymie their broader ambitions. Take the tens of thousands of mainland factories they operate just across the Pearl River Delta. What good is making loads of cash if the pollution sent to Hong Kong is so bad that kids can't play outside? Li faces a particular dilemma as he tries to sell the city's No. 2 grocery chain ParknShop for $3 billion to $4 billion: surging rents are turning off would-be buyers. In Hong Kong, Li has long been known as “Superman.” It'll take one to figure out how to keep one part of his empire from devouring another.
Bangladesh's Muhammad Yunus is getting a little help from powerful friends.
Sadly, Bangladesh is now best known for deathtrap garment factories that enrich the Wal-Mart's and H&M's of the world. But before all that, it was the proud birthplace of Grameen Bank, creator of the microfinance industry that's benefited hundreds of millions of people. The government has made noises about seizing control of the lender, which was founded by Nobel laureate Yunus, a political rival of Prime Minister Sheikh Hasina. The power grab provoked Richard Branson, Paul Volcker and other global luminaries to weigh in. They are a takeover would have a chilling effect on lending to poor people far beyond the nation's borders -- not to mention doing even more harm to Bangladesh's global image.
End of era of cheap rice is good news for Asia's poor.
On the surface, it seems like decidedly bad news: rice prices are rising as production costs surge. At the Chicago Board of Trade, they've more than doubled since 2000. Paying more for their daily staple will hurt many Asians in the short run. But the biggest reason why -- growing wages that have raised prices for fertilizer, diesel, and labor -- reflects well on a region that's home to critical mass of those living on less than $2 a day. In the long run, at least Asia is making some progress in spreading the benefits of economic growth.
Australia courts ``Dutch disease'' of another kind.
Prime Minister Kevin Rudd is taking flak for being straight with voters ahead of a Sept. 7 election: their country is addicted to a slowing China and must find a new growth strategy. Australia suffers from``“Dutch disease,'' whereby the benefits of exporting natural resources lead to the neglect of other industries. Chinese demand has produced a two-speed economy, in a developed nation that should be more focused on ideas and innovation than digging things out of the ground. Yet industry says Rudd's China gloom ignores a coming natural-gas boom that will fill the gap left by declining commodity p. That would still leave Australia a captive China's fortunes -- and looking a bit too Dutch for comfort.
(William Pesek is a Bloomberg View columnist. Follow him on Twitter.)
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