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:
It's seriously hot in North Asia, and I don't mean economies or markets.
Shanghai is having its hottest summer in 140 years, while China's local governments are opening air-raid shelters as makeshift cooling stations. In Japan, southern cities like Shimanto are recording their highest temperatures ever as heatstroke patients flood hospitals around the nation. And in South Korea, public buildings are cutting off air-conditioning amid power shortages. With power grids at the breaking point and populations clamoring for relief, economists fear the losses in capacity utilization and productivity could be brtu
Shinzo Abe wants to rein in the government bureaucracy that's standing in the way of efforts to overhaul Japan's economy.
It's often said that prime ministers don't run Japan, bureaucrats do. Prime Minister Abe wants to alter this dynamic by seizing control of ministries’ seniormost appointments. Doing so would send shockwaves through Nagatacho, Japan’s Capitol Hill, but aid efforts to join the U.S.-led Trans-Pacific Partnership trade bloc and open closed industries like agriculture and energy. Abe should go further and end the corrupt practice of ``amakudari,'' whereby companies dole out executive posts to former public officials. Japan would be a much more vibrant place if its officials couldn't block change both inside government and out.
Mongolia's 14.3 percent growth is both good news and bad.
The doubling of growth in the second quarter from 7.2 percent in the first is all about the modern-day gold rush unfolding in Central Asia. Roughly 800 years after Genghis Khan welded neighboring tribes into the world’s largest empire, Mongolia's 3 million people are awakening to a reality that is as lucrative as it is unsettling. Mongolia's estimated $1.3 trillion in mineral resources could unleash vast riches. Or it could breed public corruption that squanders the wealth and traps the masses in poverty. As 2013 unfolds, Mongolia is a tantalizing test case for what economists call the ``resource curse.'' Let's hope it veers more in the direction of Norway than Nigeria.
Singapore's bet on casinos exposes some public riff raff.
It was always inevitable that Singapore's squeaky-clean image would take a hit or two when it turned to Las Vegas for an economic boost. Casinos are still a bit controversial there; the sin palaces are euphemistically called ``integrated resorts.'' Now, the government is clamping down on public servants visiting Singapore's two casinos after a number of corruption charges involving government officials in the last year. Ranked fifth on Transparency International’s Corruption Index, Singapore naturally wants to preserve its wholesome reputation. Chances are it will, just in case some of you civil servants were tempted to wager against the house.
Could China's restructuring process contribute to an economic ice age?
This question comes from Uwe Bott, chief economist at the Washington-based Globalist Research Center, who worries changing priorities will stun the world economy. One major risk: the capital inflows emerging-market economies have enjoyed for the last couple years are drying up, as rich nations become more conservative and growth slows globally. China's need to rebalance its economy could pose an even bigger threat. ``China will soon deploy more investments inward to recapitalize banks and bail out indebted provinces,'' Bott predicts. Hopefully the moves will produce more of a chilling effect on global output than an ice age.
(William Pesek is a Bloomberg View columnist. Follow him on Twitter.)