Pesek on Asia: India's Inflation War
Good morning. Here's my take on some of the stories driving the debate in politics, finance and social issues across Asia today:
India's got a new inflation target.
Raghuram Rajan is declaring war on the inflation that's currently slamming India's economy, irking foreign investors and damaging the rupee. I'm not being overly dramatic here. Since September, Rajan has done a fine job running the Reserve Bank of India and restoring some semblance of calm after a chaotic 2013. But by setting a 4 percent consumer-price-inflation target, Rajan is throwing down the gauntlet and preparing for battle against any number of upward price pressures -- food, fuel and election-year pork-barrel spending, you name it. It's great to see Rajan's glove on the ground. India needs a dose of anti-inflation shock therapy.
China's billionaire crisis.
Minting loads of new millionaires and billionaires would all seem part of Deng Xiaoping's grand plan. After all, the founding father of modern China proclaimed that to get rich is glorious. The trouble is, some of those now raking in the big dough appear to be closely related to Deng's political heirs, as documents obtained by the International Consortium of Investigative Journalists allege. Even the name of President Xi Jinping's brother-in-law has come up in press reports detailing a series of secretive offshore accounts. Just a reminder to anyone who thinks Beijing is going to have an easy time restructuring an economy to pull it away from the grasp of the 1 percent.
Bill Gates dreams big. Maybe too big.
The world’s richest man is going out on quite a limb by predicting that the scourge of poverty will have stabilized by 2035. “The facts are on the side of the optimists,” Gates tells Bloomberg Television. “It’s actually dangerous that people are focusing on the bad news and not seeing the progress we’ve made. It means they don’t look at the best practices; it makes them less generous.” Yet here in Asia, home to a critical mass of the world's extreme poor (defined by those living on less than $2 a day) it's hard to believe no nation will be as poor as any of the 35 the World Bank classifies as low-income 21 years from now. Not unless governments act today and boldly to eradicate the corruption that squanders growth. I'm guessing the World Bank will still be plenty busy come 2035, and beyond.
China's Facebook killer App?
Hats off to Sheryl Sandberg for becoming one of the youngest billionaires ever after Facebook's giant 2012 initial public offering. The company's success is all the more impressive when you consider it has thrived without China, by far the largest Internet market. Even if Facebook did try to tap China, bowing to the Communist Party's censorship dictates, it may be too late thanks to Weixin. The wildly popular social communications system could be the app that eclipsed Silicon Valley.
Old problem gets new Davos focus.
Asia's newest problem is also an old one: aging populations. The United Nations, for example, projects that by 2030, Asia will be home to 565 million people who are 65 and over. By 2050, 900 million Asians -- nearly three times the current population of the U.S. -- will be rounding the curve of life toward 70. This demographic metamorphosis will have epic implications for economic trends, government debt loads and the future of science and technology. Not surprisingly, this will be a big topic of discussion among the Davos set this week. Age catches up with all of us, even the world's most dynamic region.
(William Pesek is a Bloomberg View columnist. Follow him on Twitter.)