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:
Is India's rupee crisis a good thing?
Indian policy makers would shudder at the mere question as the central bank scrambles to halt the currency's biggest plunge in two decades. It's even selling dollars to India's biggest state-run crude-oil importers through a swap facility to slow the decline. But Paul Mackel, a Hong Kong-based strategist at HSBC Holdings, thinks the rupee's drop is a necessary evil warranted by a widening current-account deficit. Besides, he argues, India's export sectors are in need of a boost. "I'd be more concerned if India didn't let this needed adjustment play out over time," Mackel says. "It's actually a good thing." Let's see if Delhi comes around to that view.
Japan's nuclear watchdog muddies the radioactive water.
OK, first Tokyoites living 135 miles away from the leaking nuclear reactor in Fukushima worried that plant operator Tokyo Electric Power was understating the leakage. Then the came clean under pressure from the Nuclear Regulation Authority. Now Japan's watchdog suggests Tepco may be overstating the 300-metric-ton leak. Meanwhile, Japan's 126 million people are left wondering, "huh?" Really folks, get your act together. The eyes of the world are on Fukushima, and that includes the International Olympic Committee. Such informational chaos won't help Japan's chances for the 2020 Games.
When does a stock rout become a full-fledged panic?
Investors in Southeast Asia are wondering just that as stocks across the region tumble faster than at any time in the last 12 years. Foreign accounts are clearly selling first, asking questions later. That's leading to more than a whiff of panic. Even worse, there is no sign that things will calm down as traders brace for everything from Federal Reserve tapering to a Chinese slowdown to military action in Syria to fresh volatility in commodity markets. If ever there were a time to fasten your seatbelts in Asia, it's now.
Barack Obama's Malaysian challenge.
Human-rights activists will be in a tizzy ahead of the U.S. president's visit to Kuala Lumpur in October. The question is whether the Nobel Peace Prize recipient, constitutional lawyer and first black U.S. leader will broach the topice of Malaysia's official racism -- its four-decade-old affirmative-action program favoring ethnic Malays. The Asia Sentinel website offers a fascinating look at what it sees as a double standard: Obama's willingness to call out other nations for discrimination, but not Malaysia's marginalization of Chinese and Indian minorities. Obama's meeting with Prime Minister Najib Razak may turn out to be an interesting one indeed.
With new bank, BRICs put cart before horse.
The BRICS economies -- Brazil, Russia, India, China and South Africa -- moved closer to setting up a new development bank to counter the dominance of advanced nations over the global financial system. In theory, there's nothing wrong creating an entity that would sideline the International Monetary Fund, but first things first. Before the BRICS try to take on the world, they might want to get a handle on the crises afflicting most of their members, India merely being the most obvious example. Talk about putting the proverbial cart before the horse.
(William Pesek is a Bloomberg View columnist. Follow him on Twitter.)