Pesek's View From Asia
My take on some of the stories driving the debate in politics, finance and social issues across Asia today:
Australian Prime Minister Kevin Rudd has won back voters who abandoned his ruling Labor party during Julia Gillard's tenure.
Since exacting his revenge last month -- Gillard led the move to oust Rudd as Labor leader in 2010 --Rudd seems to have reassured Australians who had grown disillusioned with Labor’s infighting and its policies on carbon trading and asylum seekers. Voters now favor him as leader 51 percent to 34 percent over his main rival, Tony Abbott. But Rudd, who ended his last term with atrocious ratings, has yet to articulate the fresh vision Australians crave. What, for example, will Australia's mining-heavy economy do as China swoons? If the PM knows, he's not saying. He'd better start if he wants his bounce to last until September's elections.
Thailand banned the use of bitcoins, becoming the first country to reject the increasingly popular virtual currency.
The central bank made the call, concerned about a lack of applicable laws, the nature of Thai capital controls and, according to a company statement, "the fact that Bitcoin straddles multiple financial facets." To me, that sounds suspiciously like Thai authorities don't know what to make of this crypto-currency, and they won't be the last. The virtual money is under scrutiny by U.S. and U.K. authorities who worry bitcoins can be used to evade taxes or launder money. Is Thailand setting a global precedent that will cost high-profile backers like Tyler and Cameron Winklevoss of Facebook fame millions? At the least, the Winklevii had better keep some real cash on hand for their next trip to the Land of Smiles.
The Philippine central bank is on hold through 2014, as inflation remains subdued despite a growth rate besting China's.
Governor Amando Tetangco can take that long vacation he's been pining for with annual inflation rising just 2.8 percent, below the central bank's 3 percent-to-5 percent target range. For that, Tetangco can take considerable credit. But going forward, Philippine inflation will be more of a China story than a domestic one. China's slowdown will be a deflationary event throughout Asia and will enable monetary policy makers to ease up on fighting inflation. That should free up Tetangco's schedule to focus on other responsibilities like bank supervision and deepening capital markets. After a couple of months down the shore, of course.
Rents in Myanmar's business capital, Yangon, now trump Manhattan's, a sign of bubble troubles in the nascent Asian democracy.
It may be one of the world's poorest nations, but renting office space in Yangon costs more than $100 a square foot, compared with less than $75 in downtown Manhattan, says broker CBRE Group. That disconnect is about to get even worse as China switches on a pipeline to bring natural gas from the Bay of Bengal to southwest Yunnan province. A sudden influx of revenue and investment has derailed many other once-promising growth stories. To ensure Myanmar’s boom is sustainable, officials will have to improve a rudimentary banking system, devise a credible judicial apparatus and improve infrastructure. As if the clock weren't ticking fast enough already, they're now working on Manhattan time.
Sony tormentor Daniel Loeb leveled new criticism at the Japanese giant, pressing the case for an initial public offering of its entertainment unit.
If activist-investor Loeb, chief executive officer at New York's Third Point, expects Sony to heed his advice to spin off the entertainment divisions and focus on hardware, he's dreaming. Still, Sony shareholders should join Loeb's crusade to bring accountability to a company that went from being the innovative pride of Japan to a technology also-ran, and a bloated one at that. Even though a weak yen has helped Sony return to profitability, the recovery is more mirage than reality. So, unfortunately, is Loeb's hope that Japan Inc. insiders will listen to what a foreign shareholder has to say.
(William Pesek is a Bloomberg View columnist. Follow him on Twitter.)