Pesek on Asia: The Aussie Turns
Good morning. Here's my take on some of the stories driving the debate in politics, finance and social issues across Asia today:
Is the Aussie headed lower?
Glenn Stevens is trying to hone a new skill: jawboning. In his seven years as Australia’s central bank governor, Stevens expended little energy talking-down the perennially overvalued dollar. Yet today in Sydney, Stevens called on currency traders to "take care” and said: “It seems quite likely that at some point in the future the Australian dollar will be materially lower than it is today.” The central bank is grappling with the impact of a currency that’s about 10 percent above its average in the past decade even as a record mining investment boom ebbs and China's outlook darkens. In a world of uncertainty, at least one thing is clear: the Aussie is no longer a one-way bet.
Tiananmen Square's car troubles
Turns out, the sport-utility vehicle that morphed Beijing's Tiananmen Square into a scene of carnage and global intrigue on Monday may have been a suicide attack. Motives are still unclear, but police have identified two people from the far western region of Xinjiang as being linked to the crash that killed five people -- three inside the vehicle and tourists from the Philippines and the southern province of Guangdong. While it's too soon to draw conclusions, Monday's explosion is a reminder of China's restiveness at a time people have been focusing on its economy alone. All this comes at a sensitive time for the Communist Party, too, ahead of next month's party plenum.
New reason to feed Asia's hungry masses
With its rapid growth rates, buoyant stock markets and rising share of the luxury-goods market, it's easy to forget Asia is home to a critical mass of the world's extreme poor. According to the Asian Development Bank, 1.7 billion people in this region get by on less than $2 a day. It's hardly news that the malnutrition inherent to low incomes affects development. But here’s a new study of brain scans, published in JAMA Pediatrics, suggesting living in poverty without adequate nurturing impedes learning and memory. Talk about food for thought in a region whose future hinges on the brainpower of its young and swelling populations.
Dark side of Toyota's success
General Motors is again looking over its shoulder, as Toyota outsold all car makers for the second time in three quarters. The global media, this Quartz piece being representative, is gushing over how manufacturers are benefiting from Abenomics and its success weakening the yen. But there's the dark side as even troubled brands such as Sony swing back to profitability. Did Sony, the one-time game-changer that redefined consumer electronics with the transistor radio and the Walkman, dream up a new gadget better than Apple’s iPhone, iPad or iPod? No. Has Sony raised productivity? Nope. The weak yen is taking pressure off Japan to raise its game at the worst possible time. Today's good news for Toyota and Sony could be bad for the economy in the long run.
Thailand's rural boom is worth watching
A common definition of a developing economy crossing into developed territory is when growth and prosperity spread to the hinterlands. Is Thailand approaching such a turning point? For much of its history, the powerhouse of Southeast Asia’s second-biggest economy has been its glitzy capital, Bangkok. Now, says Bloomberg Markets magazine, a convergence of local and international currents is reshaping the nation’s economic geography. Prime Minister Yingluck Shinawatra is lifting rural incomes by subsidizing Thailand’s 17 million rice farmers and raising the minimum wage to $10 a day. It's a dynamic that deserves more global attention.
(William Pesek is a Bloomberg View columnist. Follow him on Twitter.)