Pesek on Asia: India's Onion Problem
Good morning. Here's my take on some of the stories driving the debate in politics, finance and social issues across Asia today. I'll be off the next couple days, so these briefs will resume on Friday:
India's onion problem
It's enough to bring tears to Raghuram Rajan's eyes. Since taking the governorship at the Reserve Bank of India in September, Rajan has done battle with currency speculators driving the rupee lower, bond markets pushing long-term yields higher, and bank regulators reluctant to allow foreigners to open more branches. His latest challenge? Onions, a staple for India’s 1.24 billion people. The wholesale-price index for onions hit an all-time high and has surged 155 percent this year. Who says central banking is a bland business?
Caroline Kennedy brings Camelot to Tokyo
It's hard to remember the last time Japanese were this excited about an American ambassador. Chalk it up to the Kennedy mystique. The only daughter of late President John F. Kennedy met Emperor Akihito in Tokyo today to receive her diplomatic credentials, becoming the first woman to hold the job. Great timing, as Prime Minister Shinzo Abe is under pressure to empower Japan's women. Along with the glamour of the Kennedy lineage, Japanese are heartened to have a U.S envoy with a direct line to Barack Obama's White House. But given rising tensions with China, controversies over U.S. troops in Okinawa and radiation leaking in Fukushima, where workers this week began the dangerous task of removing spent fuel rods, Kennedy won’t have much of a honeymoon.
War between China and Japan?
Speaking of China-Japan tensions, Financial Times columnist Gideon Rachman ponders the unthinkable: a collision between East Asia's two great powers that turns violent. Always a dangerous flash point, tensions over disputed islands that Japan calls Senkaku and China calls Diaoyu could reach a fever pitch over the next few years. Rachman questions whether China's recent decision to set up a National Security Council is an ominous development, especially as Japan creates its own U.S.-style NSC. While war is a very low probability event in Asia, wish me luck sleeping tonight.
Weather's $200 billion damage bill
As Filipinos try to pick up their lives post-Typhoon Haiyan, the world is counting the fast-mushrooming costs of weather-related damage. In 1980, losses were roughly $50 billion annually. But according to Munich Re insurance group, they averaged more than $200 billion annually over the last decade. The solution is no surprise: preparedness. But this World Bank report underscores the extent to which governments aren't doing nearly enough to protect their populations from the increasing frequency of deadly weather events like Haiyan. It's a wakeup call that heads of state the world over need to hear.
The Soviet question hanging over Beijing
So what was China's much-analyzed four-day conclave that ended Nov. 12 really about? Here, the South China Morning Post offers an intriguing answer: the Soviet Union's implosion. In the 1950s, many Chinese liked to say that “today’s Soviet Union is tomorrow’s China," as Beijing faithfully followed Moscow’s footsteps in development. That was back in heyday of the Sino-Soviet socialist brotherhood. Today, of course, the Communist Party has a vastly different view of what it can learn from the Soviets. Fear of a similar outcome informed discussions in Beijing last week as well as their outcome: economic reforms that did not challenge continued state control over all aspects of life and commerce.
(William Pesek is a Bloomberg View columnist. Follow him on Twitter.)